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Regulatory Round-up

Consultation: Rule and Statement of Guidance on Market Conduct for Virtual Asset Service Providers (VASPs)

On 23 May 2025, CIMA released its Private Sector Consultation Paper on a newly proposed Rule and Statement of Guidance on Market Conduct (the “RSOG”) for Virtual Asset Services Providers (the “Consultation”). The newly proposed measure builds on CIMA’s earlier Statement of Principles – Conduct for VASPs as well as recent amendments to the Virtual Asset (Service Providers) Act (As Revised) (the “VASP Act”).

The purpose of the proposed measure is to set out clear, enforceable and transparent framework for the conduct, operational, and governance standards applicable to VASPs under the VASP Act. In addition, to incorporate CIMA’s approach to, and expectations in, supervising VASPs, including the manner in which its powers under the VASP Act will be exercised to ensure compliance and mitigate market and consumer risks.

In developing the proposed measure, CIMA conducted a review of Dubai, Malaysia, the Bahamas, Malta and Abu Dhabi and the Consultation documents include a helpful table of how the Cayman Islands’ RSOG compares to these other jurisdictions in relation to enforceability of regulatory measures and reporting requirements.

The RSOG addresses various aspects of a VASP’s operations, including marketing and advertising, client agreements, complaints handling, public disclosures, cross-border transactions, own account trading. These measures are not unlike the framework of measures that applies now under the Regulations to the Securities Investment Business Act (As Revised) (“SIBA“), although the RSOG also includes further Rules in relation to virtual asset trading platforms and virtual asset custodians that tailor it to the unique context of virtual asset services.

The Consultation documents are available at https://www.cima.ky/consultation. Responses were due by 25 June 2025.

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