The Securities and Exchange Commission (SEC) said its new rules on crypto asset service providers (CASPs) do not prohibit cryptocurrency trading in the Philippines, but requires platforms to register to protect investors and maintain market integrity.
“The CASP rules do not prohibit cryptocurrency trading or investment. Instead, they need the platform to obtain appropriate registration and license before the Philippines provides services,” the company regulator said on its website on its website published on August 14.
It added: “This ensures that investors are protected, market integrity is maintained, and that all market participants operate on a level playing field.”
The SEC said the CASP rules, which came into effect on July 5, apply to all local or foreign entities that provide crypto asset services in the Philippines. Therefore, the Commission urges local and foreign platforms to register and comply.
“We recognize the importance of a free-competitive market, but are responsible for protecting investors and supporting sustainable growth in the crypto industry in the Philippines,” the SEC said.
The Commission said the enforcement of CASP rules is authorized by its legal authority to investigate and take action against unregistered entities, which may include measures to limit access to non-regulated platforms.
“These actions are intended to protect the public from risks such as fraud, loss of funds and the risks that often increase during growth in market activity,” it said.
On May 30, the SEC issued Memorandum Circulars 4 and 5, which respectively stipulated CASP rules and guidelines on CASP operations.
According to the guidelines, CASP must be registered as a company with a minimum paid capital of P100 million in cash or property, excluding cryptocurrency assets. They also have to have a sports office that is equipped with proper staff during normal working hours.
The initial application fee for registration application is P50,000. CASP will also pay supervision fees to the SEC based on the total revenue of the previous year to enjoy the privilege of doing business.
The SEC warns that violators could be punished for one to five years in prison or fined between 50,000 and 10 million people.
Earlier this month, the SEC issued a consultation warning the public about ten cryptocurrency platforms that offer crypto asset services without the necessary license. These platforms include OKX, BYBIT, MEXC, KUCOIN, BITGET, PHEMEX, COINEX, BITMART, POLONIEX and KRAKEN.
“These platforms do not have permission, registration or authorization for SEC to conduct business in the Philippines or solicit investment from the public. Their actions are unauthorized and put Filipino investors at great risks, including full capital loss, no legal basis, and exposure to fraud, market manipulation and identity theft, including fraud, market manipulation and identity theft,” he said.
Crypto assets refer to “an encrypted digital representation of value or rights that relies on a cryptographically fixed distributed ledger or similar technology to verify and secure transactions that can be transmitted, stored or traded electronically.” On the other hand, crypto assets securities are crypto assets provided as securities.
CASP is the operation of a business entity that provides or provides one or more crypto asset services, including the operation of a digital platform that provides such services. – Revin Mikhael D. Ochave
