The Cayman Islands’ financial regulator expanded oversight of the virtual asset sector in 2025, including cancellation of a VASP registration over findings of fraud, as new licensing requirements reshaped the framework governing virtual asset service providers.
The Cayman Islands Monetary Authority‘s 2025 annual report called the year a “pivotal moment” for the sector, with phase two of the VASP Act taking force in April, establishing mandatory licensing requirements.
With Cayman’s Financial Action Task Force mutual evaluation scheduled for December 2027, CIMA took on a series of VASP-related initiatives.
These included participation in a National Risk Assessment working group, specialised training for supervisory staff and hosting of a regulatory forum with 575 stakeholders.
Cross-agency collaboration, both locally and internationally, advanced much of CIMA’s VASP regulatory efforts in 2025.
The authority collaborated with the Cayman Islands Bureau of Financial Investigations and the Financial Reporting Authority on intelligence-sharing and perimeter monitoring activities.
It also deployed the Anti-Money Laundering Division and the On-site Inspection Unit to conduct “full-scope inspections” of five VASP registrants.
More than 70 entities in the VASP space were issued requirements or directions letters throughout the year ordering them to seek registration, provide information or cease unauthorised activity.
VASP cancellation
CIMA’s most significant VASP enforcement actions came against the HAYVN group of companies, whose Cayman registrations were cancelled in June 2025 following findings of fraud, AML failures and mismanagement.
The enforcement efforts involving HAYVN brought together CIMA and Abu Dhabi’s Financial Services Regulatory Authority, who issued millions of dollars in fines against HAYVN’s Cayman entities, registered through AC Holding Limited, and director Christopher Flinos in April 2025.
FSRA, which previously acknowledged CIMA for its cooperation in the investigation, found HAYVN had produced over 200 false and misleading documents to banking partners to open and operate accounts.
Under the VASP Act and Anti-Money Laundering Regulations, CIMA found AC Holding to be “carrying on business fraudulently or otherwise in a manner detrimental to the public interest” and that Flinos was “not a fit and proper person”.
These and other violations resulted in CIMA cancelling AC Holding’s VASP registration, HAYVN Funds SPC’s mutual fund and Flinos’s directorship registration.
As at the end of 2025, Cayman had 18 VASP registrations, unchanged from 2024 and down one from 2023. These registrants largely focused on virtual currency exchanges and custody services.
Pending Phase III VASP regulations will relate to sandbox licensing and new virtual assets.
