The Securities and Exchange Commission Philippines shared a draft of its cryptocurrency regulations framework. Stakeholders are invited to give feedback on the draft no later than Jan. 18, 2025.
According to the recently shared document, the published regulatory draft is titled “SEC Rules on Crypto-Assets Service Providers (CASP Rules).” The framework covers a range of crypto trading activities, including the requirements necessary to get an SEC-issued license, market activities, and public offerings.
The SEC Philippines emphasized the importance of creating a regulatory framework for cryptocurrency, as the nation 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.”
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 wish to operate in the Philippines. Stakeholders are also urged to give input regarding the regulatory framework up until Jan. 18, 2025.
To be eligible for a CASP license, firms have to comply with the rules outlined in the framework, have at least four staff members who reside in the country, must have a stock corporation registered with the SEC, and must meet the minimum capital requirements set by the SEC.
If a registered firm is thought to have violated the rules outlined in the framework, the SEC will conduct an investigation into the crypto firm’s business dealings and daily operations to detect any wrongdoings. Sanctions include fines, a cease and desist order, and revocation of the CASP license.
In order to mitigate 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 have to go through regular audits and review procedures to ensure their systems are protected against emerging threats.
On the other hand, companies planning to conduct public offerings to sell or distribute crypto assets must first submit a disclosure document to the SEC. The document should also be published on the firm’s website and all social media platforms at least 30 days before the actual offering takes place.
The disclosure document should include information on the crypto asset offeror, the crypto asset issuer, the underlying technology used, rights and obligations linked to the crypto asset, potential risks, and warnings about the possible loss of value.
Additionally, the document also has a special section outlining the prohibition of market manipulation, insider trading, and unlawful disclosure of Information.
In May 2024, the Philippine SEC Chair Emilio B. Aquino declared that the government agency would introduce a set of guidelines to regulate crypto trading activity by the second half of 2024. The announcement came a few months after the Philippine SEC banned Binance from operating without a license.
