Philippines SEC releases new crypto regulatory framework draft

The Securities and Exchange Commission Philippines shared a draft of its cryptocurrency regulatory framework. We invite stakeholders to provide feedback on the draft by January 18, 2025 at the latest.

According to the recently shared document, the title of the published draft regulation is “SEC Rules for Crypto Asset Service Providers (CASP Rules)”. The framework covers a range of crypto trading activities, including requirements to obtain a license issued by the SEC, market activities and public offerings.

SEC Philippines emphasized the importance of creating a regulatory framework for cryptocurrency as the country sees 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 that can ensure markets are fair, efficient and transparent.”

As a result, the SEC proposed through the draft that crypto service providers must register with the SEC and obtain a CASP license if they want to operate in the Philippines. Stakeholders are also asked to comment on the regulatory framework by January 18, 2025.

In order to be eligible for a CASP license, companies must comply with the rules specified in the framework, have at least four personnel residing in the country, have a joint stock company registered with the SEC, and meet the specified minimum capital requirements. by the SEC.

If a registered firm is deemed to have violated the rules set out in the framework, the SEC will conduct an investigation into the crypto firm’s business dealings and day-to-day operations to detect any wrongdoing. Sanctions include fines, cease and desist orders, and CASP license revocation.

To reduce the risks of money laundering and cybersecurity threats, CASP license holders are expected to align their systems in accordance with the National Cybersecurity Plan. They also need to undergo regular audits and review procedures to ensure their systems are protected against emerging threats.

On the other hand, companies planning to conduct an IPO 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 offering.

The disclosure document should include information about the person offering the crypto asset, the crypto asset issuer, the underlying technology used, the rights and obligations associated with the crypto asset, potential risks, and warnings about possible loss of value.

In addition, the document also includes a special section outlining the prohibition of market manipulation, insider trading and unlawful disclosure of Information.

In May 2024, Philippine SEC Chairman Emilio B. Aquino announced that the government agency will issue a set of guidelines to regulate crypto trading activities by the second half of 2024. The announcement comes a few months after the Philippine SEC banned Binance from operating without it. a license.