The Cayman Islands has warned crypto services that they most follow strict anti-money laundering rules as the jurisdiction gets ready to implement the global AML standards for crypto assets set out by the Financial Action Task Force.
The Ministry of Financial Services has issued a statement highlighting that the government is currently preparing a legislative framework to enable compliance of virtual asset service providers with these international measures.
"Persons engaged in virtual asset services in or from within the Islands are therefore reminded that they are subject to, and are required to comply fully with, the provisions of the AMLRs and all other applicable laws," the statement said.
Persons engaged in virtual asset services in or from within the Islands are therefore reminded that they are subject to, and are required to comply fully"
"Virtual asset service providers are therefore obligated to take preventative measures under the AMLRs, including customer due diligence," it added.
Services in connection with virtual assets, such as cryptocurrencies like bitcoin, already have to conduct customer due diligence under Cayman law.
Recent FATF recommendations about to the regulation and supervision of virtual assets and the provision of virtual asset services urge countries and obliged entities to comply with its recommendations to prevent misuse of virtual assets (VAs) for ML and terrorist financing.
FATF's guidance envisages globally enforceable rules to reduce and eventually eliminate money laundering conducted through cryptocurrencies. The main recommendation is a call for world leaders to implement and adopt AML measures in their cryptocurrency markets through national cooperation.
The treatment of virtual assets has been amended to take account of criminal uses of cryptocurrencies and the guidance recommends subjecting crypto-service providers to supervision and monitoring by competent national authorities, without relying on self-regulatory bodies.