Cayman Islands guide to Asset Tracing and Recovery 2025

The Cayman Islands guide to Asset Tracing and Recovery is a practical overview of asset recovery rules and procedures. Focusing on recent developments, it examines the primary processes and limitations for following and tracing fraudulently appropriated property, with due regard to the relevant legal rights and remedies, issues surrounding seizure and evidence rules.

The Cayman Islands guide to Asset Tracing and Recovery includes:

• Year in review
• Legal rights and remedies
• Defences to fraud claims
• Seizure and evidence
• Obtaining evidence
• Fraud in specific contexts
• International aspects
• Special considerations
• Outlook and conclusions

Click here to read the full Cayman Islands guide to Asset Tracing and Recovery.

Read below for the ‘Year in review’ section of the guide.

As of December 2024, there were 393 filings in the Financial Services Division (FSD) of the Grand Court of the Cayman Islands and 146 written judgments were handed down by the FSD. The Cayman Islands Court of Appeal civil division delivered 16 written judgments.

In November 2024, the Cayman Islands was appointed as a guest member of the Financial Action Task Force (FATF) for one year under its new Regional Bodies Guest Initiative. This initiative permits countries selected from under-represented regions to engage with FATF meetings and participate in working groups with the aim of including the Cayman Islands in global financial security discussions.

In April 2025, Phase Two of the Virtual Asset Service Providers (VASPs) legislative framework came into effect and provides more regulatory clarity with respect to entities already licensed under other regulatory regimes in the Cayman Islands. Where the virtual asset services offered by those entities does not alter the scope of the regulated activities already being undertaken by them, those entities may now apply for a waiver under the new amendments.

The amendments also impose enhanced obligations on all VASPs that operate a virtual asset trading platform or provide virtual asset custody. This includes introducing mandatory licensing requirements with respect to both types of service providers, stronger prudential standards and requiring that both types of VASPs have at least three directors.

Changes with respect to the Proceeds of Crime Act also came into force on 2 January 2025 concerning the Defence Against Money Laundering regime (DAML), which now requires that if a transaction is ongoing, a DAML Suspicious Activity Report must be submitted to the Cayman Islands Financial Reporting Authority (FRA) and explicit consent must be obtained from the FRA before a transaction can proceed.

Click here to read the full Cayman Islands guide to Asset Tracing and Recovery.