The Cayman Islands is experiencing a sharp rise in demand for legal frameworks supporting Web3 companies and decentralized autonomous organizations (DAOs). Cayman Finance reports that the number of registered funds grew 70% year over year to surpass 1,300 by the end of 2024, with more than 400 additional companies already formed in 2025.
These structures are increasingly used as legal governance centers for large Web3 ecosystems. According to the association, at least 17 funds with treasuries exceeding $100 million are now registered in the jurisdiction, reflecting the scale of the projects moving into the country.
Why DAOs and Web3 Firms Are Choosing Cayman
DAOs — blockchain-based organizations governed through smart contracts and tokenholder voting — are seeking clearer legal protection, especially after recent U.S. court decisions. In Samuels v. Lido DAO, a federal judge ruled that a DAO lacking a legal entity could be treated as a general partnership, exposing participants to joint liability.
This ruling accelerated interest in formal legal structures offshore.
Melissa Lim, Partner and Co-Head of the Global Fintech Group at Walkers, said the shift is unsurprising:
Gaymond Rankin, Assistant Director of the Fintech and Virtual Assets Sector at Cayman Finance, added that Cayman’s combination of modern legislation, professional services, and transparent oversight is driving the trend:
“Cayman fund companies offer DAO and Web3 communities the flexibility they value and the legal certainty global participants expect. This is essential as these ecosystems move from experimentation to managing significant treasuries.”
New Rules Arriving in 2026 Will Further Reshape the Market
The rise of Web3 funds coincides with the Cayman Islands implementing the Crypto-Asset Reporting Framework (CARF), created by the Organisation for Economic Co-operation and Development. The rules, taking effect January 1, 2026, will require crypto-asset service providers—such as exchanges, brokers, and custodians — to:
- Conduct user checks
- Collect tax residency data
- Track transactions
- Submit annual reports to the Tax Information Service
Lawyers note that CARF does not apply to structures that merely hold assets, such as protocol treasuries and investment funds. It only covers organizations actively providing exchange, brokerage, or custodial services.
The regulatory clarity is already influencing major projects. In April 2024, the dYdX community approved creating a Cayman-based legal entity. Months earlier, filings revealed that Trump Media & Technology Group’s leadership formed Renatus Tactical Acquisition Corp. I in the jurisdiction.
As Web3 matures, the Cayman Islands is positioning itself as one of the most attractive global hubs for legally compliant, scalable digital-asset organizations.
Source: https://coinpaper.com/12877/cayman-islands-becomes-a-major-hub-for-web3-and-dao-legal-structures-with-1-300-funds
