(CNS): A real estate agent raised eyebrows across the community after conducting the first-ever sale of property where a buyer used cryptocurrency. The details of the sale and buyer haven’t been released, but the Cayman Islands Monetary Authority (CIMA) has said that the multi-million dollar deal conducted using virtual assess was above board because the specialist escrow provider that processed the sale is registered with the authority. But the sale of luxury property to overseas investors and cryptocurrencies remain two of the top concerns for money laundering risk, according to the government.
Michael Joseph, the agent who sold the property using Parallel Limited, a virtual asset service provider (VASP), said this was a game changer and a “big evolution” for Cayman but “undoubtedly raises questions”.
He said that while this is the first transaction conducted using virtual currency it won’t be the last, but the potential money laundering or other risks relating to the beneficial owners or origins of the money are mitigated because of the due diligence conducted by the escrow firm.
“The standard requirement remains for the agent to complete their KYC [know your customer] process as usual,” Joseph told CNS in answer to our questions about the potential risks. “No oligarchs or drug dealers would survive the process.”
Laura Birrell from Parallel, which is the only firm of its kind in Cayman registered with the regulator, agreed with Joseph. “Nefarious players would be unlikely to survive the diligence process that not only Parallel carries out, but the real estate agents and lawyers carry out too,” she said.
Until now, without this type of go-between, described as gate-keepers by government officials, investors have not been able to buy property using cryptocurrency as it was impossible to satisfy the source of funds and compliance requirements, Joseph said.
Although property sales are regulated by the Department of Commerce and Investment, cryptocurrencies are regulated by the Cayman Islands Monetary Authority, so this sale fell under CIMA supervision. CIMA said that it has consulted with other government agencies, and will continue to do so where legally permissible and necessary, to provide proper oversight of these types of regulated and registered entities.
“In accordance with the Anti-Money Laundering Regulations, Parallel is subject to AML/CFT supervision by CIMA and is, therefore, obligated to comply with such regulatory requirements, including the Travel Rule, which requires all VASPs to obtain, hold and share specific information on virtual asset transfers,” CIMA officials told CNS. “As with all regulated entities, CIMA will continue to monitor Parallel’s business activities to ensure compliance with the VASP Act and AML legislation.”
The DCI said registered entities, such as the broker in this transaction, are supervised to ensure they are AML/CFT compliant, as required by the AML regulations. “As part of this supervision, transactions such as the recent sale of property by way of cryptocurrency are reviewed for compliance with AML legislation and forms part of the ongoing monitoring carried out by DCI’s compliance team for its regulated entities,” a spokesperson stated.
Nevertheless, virtual assets and cryptocurrency transactions as well as the sale of property to overseas buyers remain key areas of vulnerability for the Cayman Islands, according to its own experts. Both the DCI’s 2021 Supervisory Report and the National Risk Assessment 2021, which were recently made public, noted the risk posed by the real estate sector.
The NRA found that virtual assets present a high risk, and despite a global transaction volume of some US$3 trillion in cryptocurrency and its integration into the mainstream economy, criminals can transfer, integrate and layer illicit funds into virtual assets, and then back to fiat currency, to obfuscate the original source and purpose of the asset.
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Crypto has grown into the world’s largest and most dangerous scam. What began as a currency to buy and sell illegal drugs on the Silk Road to avoid regulators is now being normalized as “safe”.
This isn’t “key areas of vulnerability for the Cayman Islands”. Did someone (govt) get their share? Yes! And the problem is??? I’d say the destruction to beaches and the now “plastic sand” outshines this
Can someone tell us how El Salvador is doing since introducing bitcoin as a currency?
Actually CNS it was two real estate companies who were involved. The listing side are just the ones bragging about it thought they did not bring the purchaser nor have anything to do with the transaction.
The story actually mentions both sides: it just doesn’t mention the name of Michael Joseph’s company. I am not sure why not.
Kudos to Parallel for making this work. As was pointed out on SEVERAL occasions, Parallel are regulated by CIMA and are subject to strict AML/KYC checks – the same as any law firm or bank. These fears are outdated; the narrative that every person who owns crypto is a criminal is simply not true.
Cayman real estate market at an all time high, while crypto currencies are taking a beating. Why on earth would anyone trade a hard asset that has historically increased in value, for crypto currency’s volatility? No thanks.
“Why on earth would anyone trade a hard asset that has historically increased in value”
because I bought my bitcoins at $65 USD a piece, and today they’re hovering around 20k. Granted, it hit 60k at some point, but I am still QUITE in the green.
Crypto’s graphs have had crashes, as with every stock, but it has always eventually recovered and surpassed the crash.
Crypto soon crash.
“Why on earth would anyone trade a hard asset that has historically increased in value, for crypto currency’s volatility?”
The sentence before this literally answers your own question! BUY LOW SELL HIGH!!
Crypto is the fluidity of the future financial marketplace. It will culminate in the ubiquitous, subcutaneous chip that will connect you and all of your records into the global database.
XML flew under the radar, but now it underpins all structured data transfer.
Well X does indeed mark the spot. I am talking about Ripples’ XRP and XLM.
These cryptos will be the foundation of the future real-time financial marketplace.
I remember doing a class in 2001 regarding XML. This was just after the Bill Gates book, “The Road Ahead” was released.
There was going to be only one result.
Get ready for your chip.
Crypto bro!
Crypto will fail, and when it does it will take down the global economy.
You got to be as arrogant and stupid as the recently fined financial service firms not to fool CIMA.
Ah Crypto, solving all the problems no one legit has since 2009.
Finally, someone happy to prove they have both feet planted in the past. Carry on while the world … moves forward.
lol. if you say so.
“No oligarchs or drug dealers would survive the process.”
Since when do oligarchs not survive the process? They own almost everything last time I checked.
Funny to see CIMA tout this as a success when there are completely unregulated entities working in the crypto markets out of the Kirkconnell protected Enterprise City.
Interested in some snake oil that I have for sale?
Funny, it’s as if regular old FIAT currency (that’s the US and Cayman Dollars) has never facilitated any crimes at all!
People always fear the new, and those who stand to lose the most from change are always the loudest..yes cayman banks, I’m talking about you
That is completely not what the article said.
Who said it did?
How about tax the billions of dollars of cryptocurrency that goes through cayman every day/week.
Look at all the exchanges that operate out of Cayman. Binance is the largest exchange is in Cayman.
Anti-Money Laundering Regulations are a joke, they have admitted they have never convicted anyone they just oversee transactions.
Most people don’t know anything about crypto.
How about you think through your suggestion for a second. Why do you think crypto “goes through” here? If there were taxes, do you think it still would?
A lot of people DO know about crypto currency, and they avoid it!
By the way….. Isn’t “crypto” a synonym for”FAkE”?
i think i will just bury my head in the sand an invest in things that acctually exist,bricks &mortor ,gold etc.that way all you everso intelligent fantasy beliving modern folk can mock me an call me a dinasor.i also wont wake up one morning to find my assets have vaporised.
Just remember………………It could also turn into Crapto.
I’ll buy one laundromat please
You would be insane to trade bitcoin for property right now. Our property market is way over inflated and the crypto market like the stock market has taken a big hit thanks to the Biden administrations terrible policies.
Whoever received the crypto, well done to you! You’ll be worth an absolute fortune in a few years!
That’s a bit like saying you would be insane to trade cash for property right now, when you could trade it for deflated-cost stocks. Doesn’t matter if I want a house.
Unless you hold a bunch of Bitcon and know it’s actually rubbish.
No one asks why are Bitconers always buying hard assets if their cons are so undervalued.
It’s called diversification.
So you doubt this is a the golden egg?
Only a fool would bet it all on one egg.
Because they can afford to
Or not !
Plz tell us all the SPECIFIC policies that Biden has put into place that have affected Bitcoin and the stock market. 😂🤣😂🤣 You might wanna take an economics course or ten.
whoever got the crypto worth a fortune in a few years?or worth f##k all in the blink of an eye more like.an we all know the most likly outcome.
How was the stamp duty paid, assume CIG won’t accept crypto and the traditional methods of payment of stamp duty applied?
lots of Cayman real estate is being bought and sold this way. This only making news to market the agent and make CIMA look cutting edge zzzzzz
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