🌎 Philippines Drafts Crypto Regulations Framework

Philippines Unveils Draft Cryptocurrency Regulations Framework

The Securities and Exchange Commission (SEC) of the Philippines has shared a draft of its cryptocurrency regulations framework, inviting stakeholders to provide feedback by January 18, 2025. The draft, titled “SEC Rules on Crypto-Assets Service Providers (CASP Rules),” outlines a comprehensive set of guidelines for crypto trading activities, including licensing requirements, market activities, and public offerings.

Importance of a Regulatory Framework

The SEC Philippines emphasized the need for a clear and robust regulatory framework to ensure the growth and development of the cryptocurrency sector in the country. As stated by the SEC, “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.”

CASP License Requirements

To operate in the Philippines, crypto service providers must register with the SEC and obtain a CASP license. To be eligible, firms must:

Comply with the rules outlined in the framework
Have at least four staff members residing in the country
Have a stock corporation registered with the SEC
Meet the minimum capital requirements set by the SEC

Sanctions for Non-Compliance

In the event of a registered firm violating the rules outlined in the framework, the SEC will conduct an investigation and may impose sanctions, including:

Fines
Cease and desist orders
Revocation of the CASP license

Risk Mitigation Measures

To mitigate the risks of money laundering and cybersecurity threats, CASP license holders must align their systems with the National Cybersecurity Plan and undergo regular audits and review procedures.

Public Offerings

Companies planning to conduct public offerings to sell or distribute crypto assets must submit a disclosure document to the SEC, which should also be published on the firm’s website and social media platforms at least 30 days prior to the offering.

The disclosure document must include information on: