Cayman Islands to Regulate Crypto “Casinos”: The Party’s Over

• The Cayman Islands to require licenses for crypto custody and trading firms by April 2025.
• Increased regulation could boost stablecoin adoption and reduce market manipulation.
• Crypto analyst Marty Party views the move as bullish, signaling greater institutional investment and industry maturation.

The Cayman Islands, long known as a hotspot for offshore crypto exchanges, is tightening the reins on digital asset firms. Starting from 1 April 2025, crypto custody and trading firms will now require licenses to operate. Existing VASPs have just 3 months to apply. While the move by Cayman islands marked a significant shift toward greater transparency and oversight in the crypto industry, crypto analysts like Marty Party called it long overdue.

He has repeatedly criticized offshore, unlicensed market makers for operating like the “biggest casino in the world“, arguing that such firms need to be brought under surveillance. Many Cayman Islands-based crypto companies, like Binance, Crypto.com, BitMart, and Bullish Global, took advantage of its previously relaxed regulatory environment.

He once argued that these “offshore centralized” platforms control over 80% of crypto pricing, interfering with the markets through leveraged futures trading. With over $100 billion traded daily triggering $1B liquidations, these exchanges surpass the entire Las Vegas casino industry ten times over. They even handle eight times the volume of global Sports Betting firms.

Cayman Islands to Regulate Crypto "Casinos": The Party's Over 3

Marty Party specifically targeted Binance’s perpetual contract market, which calls the shots for crypto pricing worldwide. Even seasoned traders struggle with these tactics as exchange-driven liquidation waves wipe out positions. This artificial volatility dampens institutional investment and distorts the actual value of assets like Bitcoin, Ethereum, and Solana.

The Cayman Islands’ Impact on the Future of Crypto Markets

In this regard, the island nation’s new framework could foster greater trust among institutional investors and pave the way for the wider adoption of digital assets in mainstream finance. Similar to traditional stock markets, offshore exchanges that operate outside U.S. regulatory rules should have watchdogs against manipulation. This would promote fairer trading practices, ultimately benefiting retail investors and contributing to a more stable crypto ecosystem.

In order to restore a fair and free market these predatory casino’s must be eliminated or regulated to not manipulate the pricing. This is the case with the single jurisdictional stock markets which do constant surveillance to eliminate insider trading and manipulation via unlicensed market making. IMO: Crypto needs the same futures market regulatory surveilance.

With crypto now part of national strategic reserves, the analyst urged the CFTC to get involved and regulate offshore futures markets, check into price manipulation, and push for changes.

Overall, the decision by the Cayman Islands could also encourage other jurisdictions to adopt similar regulations, creating a more standardized and transparent global crypto landscape.