Minister: Blockchain regulations coming down the pipeline

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Last June, the Cayman-registered blockchain firm Block.one opened its initial coin offering – the crypto version of an IPO. Nearly one year later, the company claims to have raised more than US$1 billion and reportedly has a market value of more than US$12 billion.

With Block.one and other blockchain companies raising millions of dollars through Cayman entities, financial services regulators are working to make sure that the jurisdiction is not used for nefarious purposes.

To date, there are no blockchain-specific regulations, but that could change soon. Financial Services Minister Tara Rivers said last week at the World Tokenomic Forum – a conference of blockchain practitioners that gathered in Cayman to discuss issues facing the industry – that her ministry is reviewing potential regulations.

“Last week, my ministry began considering the recommendations put to us by a working group convened by the Cayman Islands Monetary Authority regarding standards for the governance of the operation of digital assets that are marketed, traded, sold, or otherwise transferred in or from the Cayman Islands,” Ms. Rivers said. “There’s lots to consider, including the fact that we already have fintech businesses operating here.”

Ms. Rivers said that implementing crypto regulations is important for the territory’s reputation as a well-regulated financial center, and will also help legitimize the industry.

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“Regulation is actually an asset,” she said. “Regulation provides cryptos with legitimacy and broader consumer use that its developers both want and need.”

The minister was one of several government and financial services officials who spoke at the conference.

Campbells partner Richard Spencer provided insight on why blockchain companies use Cayman, drawing from his experience providing legal advice to crypto companies and funds.

Mr. Spencer said that most blockchain companies operate out of the U.K. or the U.S. and just use Cayman entities for their ICOs.

Nearly 50 blockchain companies have a physical presence here, operating out of Cayman Enterprise City; others are registered here but do not have a physical presence. Mr. Spencer told the audience that they should consult tax and legal advisers in their respective jurisdictions before raising funds from Cayman.

At least one Cayman Enterprise City blockchain company representative was at the forum: Kowala CEO Eiland Glover – whose firm is building blockchain infrastructure – said he wanted a physical presence in Cayman because his staff is dispersed throughout the world, and it’s becoming increasingly difficult to import labor into the U.S.

World Tokenomic Forum founder Chris Snook added that the legal and financial services provided by Mr. Spencer and his industry colleagues is another major reason why so many blockchain companies are coming to Cayman, and was a major reason for why he held his conference here.

 

Via: Cayman Compass

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