New data shows that Cayman Islands foundation company registrations have increased by 70% year-on-year, with more than 1,300 on the books at the end of 2024 and more than 400 new registrations already in place in 2025.
These structures are increasingly being used as legal wrappers for decentralized autonomous organizations (DAOs) and ecosystem managers for major Web3 projects.
According to a news release from Cayman Finance, several of the world’s largest Web3 projects are now registered in the Cayman Islands, including at least 17 foundation companies with coffers of more than $100 million.
Why choose DAO Cayman?
The Cayman Foundation Company has emerged as a preferred tool for DAOs, which need to sign contracts, recruit contributors, hold IP, and negotiate with regulators, while also protecting tokenholders from personal liability for the DAO’s obligations.
Legal alert for many communities came in 2024 with Samuels v. Lido DAO, in which a US federal judge found that an unincorporated DAO could be treated as a general partnership under California law, exposing participants to personal liability.
The Cayman Foundation Company is designed to bridge that gap, providing a separate legal personality and the ability to hold assets and sign agreements, while assuring tokenholders that they are not participants by default.
Add tax neutrality, a legal framework familiar to institutional allocators, and an ecosystem of companies specializing in Web3 treasuries, and it becomes clear why more projects have quietly relocated their foundations to Grand Cayman.
Elsewhere, policymakers have made big promises but delivered patchwork. US President Donald Trump has repeatedly promised to turn the United States into the “crypto capital of the planet,” but at the entity level, only a handful of states explicitly recognize DAOs as legal persons.
Switzerland remains the ideal onshore Web3 foundation center, with the Crypto Valley region now hosting over 1,700 active blockchain firms, up by more than 130% since 2020, with foundations and associations representing a growing share of new structures.
Connected: Switzerland’s Crypto Valley to reach $593B in 2024 with 17 unicorns
From light-touch heaven to compliance player
The surge in Web3 Foundation coincides with a change in Cayman’s own regulatory status – the advent of the Organization for Economic Co-operation and Development’s Crypto-Asset Reporting Framework (CARF), which the Cayman Islands has now implemented through new Tax Information Authority rules that will take effect January 1, 2026.
CARF Cayman will impose due diligence and reporting duties on “reporting crypto-asset service providers” (entities that exchange crypto for fiat or other crypto, operate trading platforms or provide custodial services), requiring them to collect tax-residency data from users, track relevant transactions, and file annual reports with the Tax Information Authority.
Legal professionals note that CARF reporting under the current interpretation applies to relevant crypto-asset service providers, including exchanges, brokers, and dealers, potentially leaving structures that only hold crypto assets, such as protocol treasuries, investment funds, or passive foundations, off the hook.
“The key question is whether your entity, as a business, provides a service effecting exchange transactions for or on behalf of clients, including acting as a counterparty or intermediary or providing a trading platform.”
In practice, this means that many pure treasury or ecosystem-manager foundations should be able to continue to benefit from Cayman’s legal certainty and tax neutrality without being pulled into full reporting status, unless they are in the business of running exchanges, brokerage or custody services.
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