What are Cayman tokenised funds, in simple terms?

They are Cayman-regulated funds that record investor interests as blockchain tokens rather than paper or legacy register entries. The economic rights are the same as traditional fund shares. The tokens live in whitelisted wallets, subject to AML checks. Transfers, subscriptions, and redemptions can move faster, while CIMA still supervises valuation, disclosure, and governance.

Does the Cayman Islands VASP Act still apply to these funds?

The bills say a regulated fund issuing its own tokens is not a “virtual asset issuance.” So the fund follows funds law, not VASP issuance rules. However, exchanges, custodians, and transfer agents that handle those tokens may still need VASP registration or licensing. The split reduces overlap while keeping safeguards for trading and custody services.

What should UK investors check before buying into a tokenised fund?

Review the offering memorandum, transfer restrictions, and wallet whitelisting rules. Ask for smart contract audits, key management policies, and outage procedures. Understand valuation methods and how redemptions work in stress. Confirm whether a UK distributor or platform handles GBP subscriptions and KYC. Finally, check whether service providers have relevant Cayman or VASP approvals.

Global Market Insights

Cayman Tokenised Funds Rules Advance: Regulatory Clarity – February 7

ByHuzaifa Zahoor February 7, 2026February 7, 2026

Cayman tokenised funds are moving closer to reality after the Cayman Islands published amendment bills in early February. The proposals place tokenised mutual and private funds inside existing funds laws and confirm that token issuance by regulated funds is not a “virtual asset issuance” under the Cayman Islands VASP Act. For UK managers and investors, this narrows key legal gaps for on-chain share classes and custody. With Parliament due to review the bills next month, we see a clearer launch path supported by stronger CIMA oversight of technology and transactions.