Cayman Islands Web3 foundations rose 70% year-on-year alongside the rollout of new Crypto-Asset Reporting Framework (CARF) rules. This growth is unfolding in parallel with regulatory reforms published in November 2025 that take full effect on January 1, 2026.
Cayman’s Foundation Boom Meets Global Reporting Rules
Registrations of Web3 foundation companies exceeded 1,300 by the end of 2024, with more than 400 new entries recorded during 2025. The jurisdiction now hosts over 125 active Web3 firms and at least 17 foundations with treasuries exceeding $100 million, signaling a concentration of large, institutionally relevant structures. The Foundation Company model, which can operate without members while enabling token-holder governance, has emerged as a central legal wrapper for DAO-style organizations.
Several jurisdictional advantages explain why growth has accelerated despite stricter oversight. Cayman’s tax-neutral environment, 0% corporate tax rate and established professional services ecosystem continue to attract complex financial and digital-asset structures. Oversight from the Cayman Islands Monetary Authority (CIMA) and a strengthened AML/CFT framework—reinforced by Cayman’s removal from the FATF grey list in October 2023—have created a predictable compliance baseline valued by institutional counterparties.
Cayman authorities published CARF-aligned regulations in November 2025, with full enforcement set for January 1, 2026. The framework extends due-diligence and reporting obligations to Reporting Crypto-Asset Service Providers (RCASPs), including exchanges, trading platforms and custodial service providers. These entities will be required to identify users, determine tax residency, track relevant transactions and file annual reports with the Tax Information Authority.
Legal advisers currently interpret Cayman’s CARF implementation as primarily targeting active service providers rather than passive asset-holding entities. Structures that merely hold crypto assets—such as protocol treasuries, investment funds or non-operating foundations—are widely viewed as falling outside the immediate RCASP scope. This distinction will shape which entities must urgently upgrade KYC, tax-residency and transaction-tracking infrastructure.
For treasuries and traders operating through Cayman entities, the immediate priority is operational readiness. Market participants must assess whether their structures qualify as RCASPs and, if so, implement compliance systems ahead of the January 2026 deadline.
The combined effect of a 70% registration increase and imminent CARF enforcement is reshaping Cayman’s role in Web3 governance. Cayman is now positioned as a mature hub where institutional capital, DAO-friendly legal structures and cross-border tax reporting are converging.