On April 28, the legislative associates of the Cayman Islands gazetted five new pieces of legislation governing crypto businesses — particularly exchanges.

How the new legislation would change the Cayman Islands' crypto industry

The Virtual Asset Service Provider Bill would establish definitions and registration requirements for companies providing crypto services including exchanges, custodians and decentralized financial operators. Accompanying this neb are amendments to other reigning pieces of finance legislation for securities and stock exchanges.

A provision included in the VASP Bill is the sandbox license. Such licenses would allow companies working on technologies that run risks, including to anti-money laundering requirements, to annals for one-year licenses to test out their models.

The press announcement accompanying the legislation describes the proposed organisation as "a flexible foundation which promotes the use of new technology and innovative enterprise." Continuing:

"The proposed framework incorporates relevant anti-money laundering, countering the financing of terrorism and counter proliferation financing (AML/CFT/CPF) recommendations adopted in 2022 by the Fiscal Action Task Force (FATF)."

FATF travel rule and tax oasis islands

The Cayman Islands are known for their lenience in business registration. The European Matrimony has placed the country on its blacklist of tax havens. Indeed, the islands are one of the names that crops upwardly as the potential dwelling of Binance's migrating registration.

The electric current legislation has only been gazetted and will have to wait for the next coming together of the legislative assembly. Given the global transition to FATF's travel rule and its establishment of traditional banking requirements for crypto businesses, the Cayman Islands volition likely demand to alter something about their current system.