The Cayman Islands has been assessed to be compliant or largely compliant in its virtual assets regime, the Caribbean Financial Action Task Force (CFATF) in its 3rd Enhanced Follow-up Report & Technical Compliance Re-Rating released in October 2021, found.
The international watchdog diagnosed that the 2020’s VASPs Act (The Virtual Asset (Service Providers) Act) along with its amendments are in “full force and effect” and that the island nation has addressed most issues in its AML/CFT laws.
The follow-up report mentions the definition of VASPS (Virtual Asset Service Providers) pursuant to the VASPs Act corresponds to the terms defined in the General Glossary of Terms in FATF Methodology.
The watchdog had conducted an assessment of TF risks on a national level and scrutinized for renowned methods of putting funds in use for terrorist activities, assigning a rating to each. Initial coin offerings specifically carry terrorism financing vulnerabilities that the reviewers focused their analyses on.
However, the island nation is still in “enhanced follow-up” category due to low levels of effectiveness in seven outcomes CAFTA holds as criteria concerning efficiency in fighting financial crime on a global level.
CFATF Report also touches on the relative unimportance of the assets under control by the industry, – USD 4.1 billion – corresponding only to 0.7% the size of those held by the banking sector. The document concludes that the island nation’s VASP sector is “not materially important to the jurisdiction” which is a top global destination for hedge funds.
