THE Securities and Exchange Commission (SEC) said its new rules on crypto asset service providers (CASPs) do not ban cryptocurrency trading in the Philippines but require platforms to register to safeguard investors and uphold market integrity.
“The CASP rules do not prohibit cryptocurrency trading or investment. Rather, they require platforms to obtain the appropriate registration and licenses before offering their services in the Philippines,” the corporate regulator said in an advisory on its website issued on Aug. 14.
“This ensures that investors are protected, market integrity is upheld, and all market participants operate on a level playing field,” it added.
The SEC said the CASP rules, which took effect on July 5, apply to all entities, local or foreign, that offer crypto asset services in the Philippines. With this, the commission urged local and foreign platforms to register and comply.
“We recognize the importance of a free, competitive market, but one that is responsibly regulated to protect investors and support the sustainable growth of the crypto industry in the Philippines,” the SEC said.
The commission said the enforcement of the CASP rules is within its legal mandate to investigate and act against unregistered entities, which may include measures to limit access to noncompliant platforms.
“These actions are designed to safeguard the public from risks such as fraud, loss of funds, and money laundering risks that often increase during periods of heightened market activity,” it said.
On May 30, the SEC issued Memorandum Circular Nos. 4 and 5, providing for the CASP rules and the guidelines on CASP operations, respectively.
Under the guidelines, CASPs must be registered as corporations with a minimum paid-up capital of P100 million in cash or property, excluding crypto assets. They must also have a physical office that is appropriately staffed during regular business hours.
Applications for registration will come with an initial filing fee of P50,000. CASPs will also pay a supervision fee to the SEC based on their gross revenue during the preceding year, for the privilege of doing business.
The SEC warned that violators may be punished with imprisonment of one to five years, or with a fine of P50,000 to P10 million.
Earlier this month, the SEC issued an advisory warning the public against ten crypto platforms providing crypto asset services without the necessary licenses. These platforms include OKX, Bybit, Mexc, Kucoin, Bitget, Phemex, Coinex, Bitmart, Poloniex, and Kraken.
“These platforms have no license, registration, or authorization from the SEC to operate in the Philippines or to solicit investments from the public. Their actions are unauthorized and expose Filipino investors to significant risk, including total loss of funds, no legal recourse, and exposure to fraud, market manipulation, and identity theft,” the SEC said.
A crypto asset refers to “a cryptographically secured digital representation of value or of a right that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions that can be transferred, stored, or traded electronically.” On the other hand, crypto asset securities are crypto assets being offered as securities.
A CASP is a business entity that offers or provides one or more crypto asset services, including the operation of a digital platform that provides such services. — Revin Mikhael D. Ochave
