The Virtual Asset (Service Providers) (Amendment) Act, 2024 is a Cayman Islands statute that amends the Virtual Asset (Service Providers) Act (2024 Revision). For CryptoSlate tracking, its status is best recorded as partially effective as of July 10, 2026: the Cabinet’s commencement order brought specified provisions into force on April 1, 2025, while the order does not list every provision on identical terms. The practical centre of the amendment is the launch of Phase Two of the Cayman Islands virtual asset service provider, or VASP, framework, administered by the Cayman Islands Monetary Authority.
The Act is aimed at tightening the regulatory perimeter for virtual asset businesses in or from the Cayman Islands. It updates core definitions, creates a clearer licensing pathway for virtual asset custody services and virtual asset trading platforms, and expands the Authority’s supervisory and enforcement tools. It should be read with the principal VASP Act, the 2025 commencement orders and the 2025 amendment regulations.
What the 2024 VASP Amendment Act changes
The amendment refines the vocabulary used in the VASP regime. It inserts or updates terms including “convertible virtual asset,” “financial services business,” “supervised person,” “originator,” and “owner” or “operator” of a virtual asset trading platform. It also updates the trading-platform definition so that the relevant platform provides a virtual asset service and facilitates exchanges involving virtual assets or fiat currency.
The law also changes the treatment of regulated financial-sector firms that are already supervised by CIMA under other regulatory laws. Instead of the older “existing licensee” concept, the Act uses “supervised person” and provides routes for those persons to seek a VASP licence, registration, or waiver depending on the activity and CIMA’s assessment.
Key provisions for VASPs
Custody and trading platform licensing
CIMA’s April 1, 2025 circular states that Phase Two brings additional obligations for VASPs providing virtual asset custody and virtual asset trading platform services in or from the Cayman Islands. According to CIMA, persons conducting or intending to conduct those services require a licence, while other VASP activities continue to require registration unless a supervised person receives a waiver.
Governance, disclosures and custody controls
The amendment adds prudential and conduct requirements across the VASP framework. These include a requirement for at least three directors, including at least one independent director, and obligations concerning accurate disclosures, advertising material and client communications. It also requires prior CIMA approval for senior officers or trustees.
For custody activity, the Act adds detailed safeguards. It addresses client disclosures, methods of access to virtual assets, insurance arrangements, grievance procedures, third-party information sharing and internal custodial governance. It also adds requirements for safekeeping, client-asset records, segregation of client assets from proprietary or affiliate assets, and protective arrangements such as trusts, segregated bankruptcy-remote accounts or equivalent mechanisms recognised in the relevant jurisdiction.
AML transfer records and supervisory powers
The Act revises the transfer-recordkeeping provision for virtual assets. When a VASP performs a transfer of virtual assets, it must collect and maintain originator and beneficiary information in accordance with the Anti-Money Laundering Regulations and provide records requested by the Authority or a competent authority within the statutory timeframe.
The amendment also expands CIMA’s toolkit. It authorises requests for information, access to books, records, documents, cash, virtual assets and securities, and the use of persons with technical expertise to examine a licensee, registered person or other person carrying on virtual asset services. Enforcement changes include broader cease-and-desist authority, revocation or cancellation powers for licences, registrations and waivers, and revised entry-and-search provisions.
Status and timeline
The Act passed Parliament on December 11, 2024, received Governor assent on December 18, 2024, and was published with Legislation Gazette No. 47 dated December 19, 2024. SL 17 of 2025 was made in Cabinet on February 25, 2025 and commenced specified provisions on April 1, 2025. The schedule commenced sections 1 to 12, 14 to 15, 17, 19 to 26, and limited parts of sections 16 and 18; section 13 is not listed in that commencement schedule.
This profile is a legal-reference summary only and does not provide legal, tax, investment or compliance advice.