In April 2026, the Mutual Funds (Amendment) Act, 2026 and the Private Funds (Amendment) Act, 2026 gave Cayman-domiciled funds a dedicated statutory footing for tokenised interests, alongside amendments to the Virtual Asset (Service Providers) Act that clarify where a registered tokenised fund sits relative to virtual asset services regulation. For managers who had been structuring tokenised vehicles around general fund law, the practical question now is not whether tokenisation is permitted, but what the new framework actually requires operationally.

CV5 Insight: The framework does not turn tokenisation into a formality. It adds specific transfer, record-keeping and disclosure obligations on top of the fund's existing regulatory footing, and an operator who treats those as an afterthought will feel it first at audit and at ODD.

What the Amendments Actually Cover

The Acts introduce defined concepts of a "digital equity token", representing an equity interest in a mutual fund, and a parallel "digital investment token" concept for private funds. This gives operators a recognised statutory basis for issuing fund interests as tokens, rather than relying on general contractual and offering-document mechanics layered over an otherwise conventional structure.

Alongside this, amendments to the Virtual Asset (Service Providers) Act clarify that a registered tokenised fund is generally excluded from virtual asset services regulation in its own right, provided the fund itself is not separately carrying on virtual asset services. Where a manager or a related entity is also providing services such as exchange, custody or transfer facilitation to third parties, that activity should be assessed against the VASP perimeter on its own terms.

Practical Implications for Operators

Transfer controls. Digital equity tokens are transferable only with the operator's approval, applied consistently with the mechanics set out in the offering document. This means transfer restrictions need to be built into the token's technical design, not left as a paper-only condition that the smart contract or register does not actually enforce.

Token-holder records. Fund administrators are expected to maintain secure records of the issuance, creation, sale, transfer and ownership of digital tokens, and to have those records available to CIMA. Confirmation of proper record maintenance is expected to be given annually, most likely through the fund annual return process, which puts the administrator's token ledger on the same footing as the conventional register of members or partners.

Offering-document disclosure. Offering documents for tokenised funds are expected to disclose the risks specific to digital equity or investment tokens, including cybersecurity considerations and transferability constraints, together with how those risks are addressed or mitigated. A generic crypto risk-factor paragraph lifted from a conventional digital asset fund's documents is unlikely to satisfy this on its own.

Where the VASP Perimeter Still Matters

The exclusion for registered tokenised funds is a function of the fund being properly registered and confined to fund activity. It is not a blanket exemption for every entity in a manager's structure. A related technology platform, a wallet infrastructure provider, or an affiliate offering token transfer or custody services to parties outside the fund should each be assessed separately against the VASP and exchange-facing obligations that already apply to digital asset businesses in Cayman.

How CV5's Platform Model Supports Tokenised Launches

Tokenisation adds a layer of technical and record-keeping complexity on top of the governance a fund already needs. A fund launched through CV5 SPC or CV5 Digital SPC starts with independent directors, an administrator, and documented operating procedures already in place, which is the structure into which the token-holder record-keeping and transfer-approval mechanics described above need to sit. This is consistent with the broader governance model for tokenised fund wallets and transfer restrictions that CV5 applies across its digital asset platform.

Risks and Caveats

This is a newly enacted framework, and market practice around its application, including exactly how annual confirmations are evidenced and how CIMA will supervise token-holder records in practice, is still developing. Managers should not assume that early guidance or precedent from other jurisdictions' tokenised fund regimes translates directly into the Cayman framework. Legal advice specific to the fund's tokenisation design should be obtained before the offering document or token mechanics are finalised.

This article is for general information only and does not constitute legal, regulatory, tax or investment advice. Fund managers should obtain advice based on their specific structure, investors, strategy and regulatory obligations.

Conclusion

The 2026 framework gives Cayman tokenised funds statutory clarity that did not previously exist, but clarity is not the same as simplicity. Transfer controls, token-holder records and offering-document disclosure now have a defined regulatory reference point, and operators should build their tokenisation design around it from the outset rather than retrofitting compliance later.

Speak with CV5 Capital about launching a tokenised fund under Cayman's 2026 statutory framework.

FAQs

Does a tokenised fund need a separate VASP licence?
Generally not, provided the fund is properly registered under the amended Mutual Funds or Private Funds Act and confines its activity to fund business. Any related entity providing virtual asset services to third parties should be assessed separately.

Who is responsible for maintaining token-holder records?
The fund's administrator is expected to maintain secure records of token issuance, transfer and ownership, available to CIMA, with confirmation of proper maintenance typically given through the fund annual return.

Does the offering document need token-specific risk disclosure?
Yes. Offering documents should disclose risks specific to digital equity or investment tokens, including cybersecurity and transferability considerations, and how those risks are mitigated.

Can an existing conventional fund convert to a tokenised structure?
This is a structural and legal question that depends on the fund's existing constitutional documents and investor base, and should be considered with legal counsel before any conversion is pursued.

CV5 Capital is registered with the Cayman Islands Monetary Authority (CIMA Registration No. 1885380, LEI: 984500C44B2KFE900490).