Crypto license: Pros and Cons of Cayman Islands

The main advantages and disadvantages of receiving a permit for the Cayman Islands

The choice of jurisdiction is one of the most critical steps in creating a crypto company, so this must be taken very seriously. In the Cayman Islands, legislation on virtual funds has been introduced since May 2020. This Law describes the rules for conducting crypto business, including the procedure for getting a permit from the regulator. Such legislation aims to comply with global standards, including privacy, CTF, AML, and KYC policies. All this ensures the reliable conduct of financial activities with assets. Today we want to discuss the main advantages and disadvantages of receiving a Cayman Islands crypto license, and we hope that the data we provided will be helpful to you.

Advantages and disadvantages of licensing here

It is very popular among many investors for cryptocurrency activities and the following reasons:

  • favorable sphere of regulation;
  • stable politics and economy;
  • access to bank services;
  • neutral taxation;
  • low registration requirements;
  • high reputation.

There are also disadvantages, but only one:

  • Mandatory presence of a physical office in the given jurisdiction.

Crypto license requirements

To legally engage in the business, you must obtain a permit. The permit ensures compliance with the terms of the AML and CTF policies. And what requirements must be met for this we will consider further.

You need to provide scans of the notarized identity cards of all employees (founders, shareholders, directors, managers) and their address registration. Develop a detailed business plan and confirm your source of funds (detailed summary of your activities + proof of business activity).

Incorporate AML, KYC, and platform cybersecurity policies into your company management to protect data and ensure privacy. Also, appoint a responsible AML officer from the local area. Your office must be located here and be registered.

Licensing Process

To get a permit, you must go through several stages.

Preliminary preparation of documents (1 – 2 weeks)

At this stage, you name the company and prepare the following documents: copies of the passports of managers and shareholders, their resumes, business project, documentary evidence of the origin of capital, and a document confirming the business activity.

Organization registration (1.5 – 2 weeks)

At this stage, you are engaged in registering your company, having previously prepared all the constituent papers. You are involved in the organization of accounting.

Licensing (2.5 – 3 months)

Choose the type of license and prepare all the necessary documents. Please apply licensing to the regulator and contact him to agree on various points.

Opening a bank account (1 – 1.5 months)

Opening a corporate account can be done in parallel with licensing. This stage involves the consideration of several banks. It is necessary to compare the bank’s risk level with the risks of the client, taking into account the AML policy. You also prepare the papers required for the selected bank to start the process of opening an account:

  • scheme of funds flow;
  • documents on the source of income;
  • indicate the purpose for opening an account;
  • name the main partners;
  • provide utility bills.

Opening a cryptocurrency organization

Since the banking sector, favorable taxation, and a stable economy are well-developed, starting your business in this jurisdiction makes sense.

Company registration

You must start by registering your company, which can be formalized as an “Ltd” or an exempt company. Your organization must have a real office.

Obtaining a permit

It would help if you were licensed by the Regulatory Authority to carry out crypto-currency activities in this territory. Licensing requires fulfilling the requirements and applying the AML, CTF, and KYC policies. The company’s employees must have the appropriate level of qualification in this area and comply with the regulator’s requirements regarding the size of the authorized capital.

Bank services

Once licensed, your firm will have access to banking services here. The banking sector functions well and attracts to this jurisdiction many investors. Ensuring access to bank services is one of the most critical moments for a financial firm.

Compliance with the rules

Organizations engaged in crypto-currency activities must follow the rules to combat illegal transfers of funds and counter the financing of terrorism. It involves applying AML and KYC policies, monitoring transactions, and notifying the competent authorities of suspicious financial transfers.

Your company will be able to issue crypto, trade it and, carry out a digital exchange of assets, store virtual funds or tools that ensure the safety of crypto.

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