International Sanctions Requirements For Virtual Asset Service Providers: A Cayman Perspective

As the war continues to rage on the Eastern front between Russia and Ukraine, the financial sanctions resulting from the initial invasions and ongoing conflict seem likely to continue to play a significant part in the global financial markets. However, financial sanctions related to Russia are not the only ones in force. As a British overseas territory, the Cayman Islands implements the international sanctions obligations of the United Kingdom (UK). There are currently 34 sanctions measures in force the Cayman Islands which include trade bans, travel bans and financial sanctions measures (Sanctions).

Sanctions apply to all persons in the Cayman Islands and those most exposed to sanctions risk are financial service providers. Virtual asset services providers (VASPs) are considered higher risk institutions in the financial market given their use of and engagement with novel technology and the potential for this technology to be used to evade financial sanctions if the