On 24 March 2026, the Cayman Islands took a significant step in the regulation of digital assets with the commencement of three interconnected amendment Acts: the Mutual Funds (Amendment) Act, 2026; the Private Funds (Amendment) Act, 2026; and the Virtual Asset (Service Providers) (Amendment) Act, 2026. Together, these Acts establish a purpose-built regulatory framework for tokenised funds—investment funds whose interests are represented by digital tokens on distributed ledger technology.
The amendments introduce clear statutory definitions for key concepts. A “tokenised mutual fund” is a mutual fund with equity interests represented by “digital equity tokens,” while a “tokenised private fund” holds investment interests represented by “digital investment tokens”. The Virtual Asset (Service Providers) (Amendment) Act complements this by carving tokenised fund issuances out of the virtual asset issuance regime, ensuring they are regulated under the funds legislation rather than the virtual asset services framework.
Fund operators face several new obligations. They must securely maintain comprehensive records of all token issuances, transfers and ownership, and confirm compliance annually to the Cayman Islands Monetary Authority (“CIMA“). Offering documents must disclose risks specific to digital tokens—including cybersecurity and transferability concerns—and explain how those risks are mitigated. Notably, token transfers require the operator’s approval, reinforcing existing investor-protection mechanisms. CIMA also retains broad supervisory powers, including the ability to inspect underlying technology and token transactions.
For fund managers and investors, the message is clear: the Cayman Islands is positioning itself as a jurisdiction that welcomes innovation within a robust compliance framework. By embedding tokenised fund regulation within its well-established funds legislation, the jurisdiction offers market participants a familiar and credible regulatory environment. Stakeholders involved in tokenised fund structures should review these new requirements carefully and ensure their operations, offering documents and record-keeping practices align with the framework ahead of any further regulatory guidance from CIMA.
For more on the significance of these legislative amendments, please refer to our earlier Industry Update on Tokenised Funds or contact a member of Maples’ dedicated Digital Assets Team.
