Latest data shows that the registration of foundation companies in the Cayman Islands has increased by 70% year-on-year, with over 1,300 on the books by the end of 2024, and more than 400 new registrations already in 2025.

These structures are increasingly being used as legal wrappers for decentralized autonomous organizations (DAOs) and as ecosystem managers for major Web3 projects.

According to a press release from Cayman Finance, many of the world's largest Web3 projects are now registered in the Cayman Islands, including at least 17 foundation companies with treasuries exceeding $100 million.

Cayman foundation companies have become the preferred tool for DAOs, which need to sign contracts, hire contributors, hold intellectual property, and interact with regulators while protecting token holders from personal liability for DAO obligations.

The legal alarm for many communities was sounded in the 2024 Samuels v. Lido DAO case, in which a U.S. federal judge ruled that unwrapped DAOs could be considered general partnerships under California law, exposing participants to personal liability.

Cayman foundation companies aim to fill this gap by providing independent legal personality and the ability to own assets and sign agreements, while assuring token holders that they are not default partners.

Coupled with tax neutrality, a legal framework familiar to institutional allocators, and a company ecosystem specializing in Web3 treasuries, it is easy to understand why more and more projects are quietly re-registering their foundations in the Cayman Islands.

Elsewhere, policymakers have made significant commitments, but the delivery has been patchy. U.S. President Donald Trump has repeatedly promised to make the U.S. the "cryptocurrency capital of the world," but on the ground, only a few states explicitly recognize DAOs as legal entities.

Switzerland remains the typical domestic center for Web3 foundations, with the Crypto Valley region now hosting over 1,700 active blockchain companies, growing by more than 130% since 2020, and the share of foundations and associations in new structures is continuously increasing.

The surge in Web3 foundations coincides with a shift in the Cayman Islands' own regulatory stance—the arrival of the OECD's Crypto Asset Reporting Framework (CARF). The Cayman Islands has now implemented this framework through new tax information bureau regulations, which will take effect on January 1, 2026.

CARF will impose due diligence and reporting obligations on Cayman "reporting crypto asset service providers" (entities that exchange cryptocurrencies for fiat or other cryptocurrencies, operate trading platforms, or provide custody services), requiring them to collect users' tax residency data, track relevant transactions, and submit annual reports to the tax information bureau.

Legal professionals point out that under the current interpretation, CARF reporting applies to relevant crypto asset service providers, including exchanges, brokers, and dealers, which may exempt structures that only hold crypto assets (such as protocol treasuries, investment funds, or passive foundations) from reporting obligations.

In practice, this means that many pure treasury or ecosystem management foundations should be able to continue benefiting from the legal certainty and tax neutrality of the Cayman Islands without being dragged into full reporting status, as long as they do not engage in operating exchanges, brokerage, or custody services.

Related: Why Texas's Bitcoin (BTC) reserve initiative signals a shift in government crypto policy

Original: “Cayman Islands Web3 Foundation Registrations Surge 70% with Arrival of CARF Reporting Rules”

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