The Securities and Exchange Commission of the Philippines has shared a draft of its cryptocurrency regulatory framework. Stakeholders are invited to give their opinion on the project no later than January 18, 2025.
According to the recently shared document, the draft regulations released are titled “SEC Crypto-Asset Service Provider Rules (CASP Rules).” The framework covers a range of cryptocurrency trading activities, including the requirements necessary to obtain a license issued by the SEC, market activities and public offerings.
The SEC Philippines has highlighted the importance of creating a regulatory framework for cryptocurrency as the country has seen rapid growth in the sector.
“The continued growth and development of new crypto asset markets, services and business models relies on clear, proportionate and robust regulatory frameworks, which can ensure that markets are fair, efficient and transparent.”
Accordingly, the SEC proposed in the draft that crypto service providers must register with the SEC and obtain a CASP license if they wish to operate in the Philippines. Stakeholders are also invited to give their opinions on the regulatory framework until January 18, 2025.
To be eligible for a CASP license, companies must comply with the rules outlined in the framework, have at least four staff members residing in the country, must have a business corporation registered with the SEC, and must meet capital requirements minimum set. by the SEC.
If a registered company is believed to have violated the rules outlined in the framework, the SEC will conduct an investigation into the business dealings and day-to-day operations of the crypto company to detect any wrongdoing. Penalties include fines, a cease and desist order, and revocation of the CASP license.
To mitigate the risks of money laundering and cybersecurity threats, CASP licensees must align their systems in accordance with the national cybersecurity plan. They must also undergo regular audits and review procedures to ensure their systems are protected against emerging threats.
On the other hand, companies considering public offerings to sell or distribute crypto assets must first submit a disclosure document to the SEC. The document must also be published on the company’s website and all social media platforms at least 30 days before the actual offer.
The disclosure document must include information about the offeror of the crypto-asset, the issuer of the crypto-asset, the underlying technology used, the rights and obligations relating to the crypto-asset, potential risks and warnings regarding a possible loss of value.
In addition, the document also has a special section describing the prohibition of market manipulation, insider trading and illegal disclosure of information.
In May 2024, Philippine SEC Chairman Emilio B. Aquino said the government agency would introduce a set of guidelines to regulate cryptocurrency trading activity by the second half of 2024. announcement came a few months after the Philippine SEC banned Binance from operating without a license.
