The Cayman Islands is experiencing a significant surge in demand for legal frameworks that support Web3 companies and decentralized autonomous organizations (DAOs). Cayman Finance reports that the number of registered funds grew by 70% year over year, surpassing 1,300 by the end of 2024. Furthermore, more than 400 additional companies were formed in the first part of 2025.
These structures are increasingly being utilized as legal governance centers for substantial Web3 ecosystems. According to Cayman Finance, at least 17 funds with treasuries exceeding $100 million are now registered in the jurisdiction, indicating the considerable scale of projects establishing a presence there.
Why DAOs and Web3 Firms Are Choosing Cayman
DAOs, which are blockchain-based organizations governed through smart contracts and tokenholder voting, are actively seeking clearer legal protections. This interest has been particularly amplified following recent court decisions in the United States. In the case of Samuels v. Lido DAO, a federal judge ruled that a DAO operating without a formal legal entity could be treated as a general partnership, potentially exposing its participants to joint liability.
This ruling has served to accelerate the interest in establishing formal legal structures offshore.
Melissa Lim, Partner and Co-Head of the Global Fintech Group at Walkers, commented that the current trend is not surprising.
Businesses in the digital assets sector are actively seeking jurisdictions that offer both legal certainty and operational flexibility. Cayman provides them with the confidence to scale their operations responsibly and to attract a broader range of participants.
Gaymond Rankin, Assistant Director of the Fintech and Virtual Assets Sector at Cayman Finance, highlighted that Cayman's combination of modern legislation, robust professional services, and transparent oversight is a key driver of this trend.
Rankin stated, "Cayman fund companies offer DAO and Web3 communities the flexibility they value and the legal certainty that global participants expect. This is essential as these ecosystems transition from the experimental phase to managing significant treasuries."
New Rules Arriving in 2026 Will Further Reshape the Market
The increasing prominence of Web3 funds is occurring concurrently with the Cayman Islands' implementation of the Crypto-Asset Reporting Framework (CARF). This framework was developed by the Organisation for Economic Co-operation and Development. The new rules, which will take effect on January 1, 2026, will mandate that crypto-asset service providers—including exchanges, brokers, and custodians—undertake specific actions.
- •Conduct user verification procedures.
- •Collect tax residency data from users.
- •Track all transactions.
- •Submit annual reports to the Tax Information Service.
Legal experts have noted that CARF does not apply to entities that solely hold assets, such as protocol treasuries and investment funds. The framework specifically targets organizations that are actively providing exchange, brokerage, or custodial services.
The evolving regulatory clarity is already influencing major projects. In April 2024, the dYdX community voted in favor of establishing a legal entity in the Cayman Islands. Several months prior, filings revealed that the leadership of Trump Media & Technology Group formed Renatus Tactical Acquisition Corp. I within the jurisdiction.
As the Web3 sector continues to mature, the Cayman Islands is positioning itself as a leading global hub for legally compliant and scalable digital-asset organizations.