The Securities and Exchange Commission (SEC) of the Philippines has released a draft regulatory framework aimed at establishing clear rules for cryptocurrency activities in the country. This draft is open for public consultation, and stakeholders are encouraged to submit their feedback by January 18, 2025.
Titled “SEC Rules on Crypto-Assets Service Providers (CASP Rules),” the framework outlines the requirements for obtaining an SEC-issued license, regulations for market activities, and guidelines for public offerings of crypto assets.
As cryptocurrency adoption continues to expand in the Philippines, the SEC emphasized the importance of robust regulations to ensure market fairness, efficiency, and transparency.
According to the SEC, “The continued growth and development of new crypto asset markets, services, and business models relies on clear, proportionate, and robust regulatory frameworks.”
Under the draft rules, all crypto service providers (CASPs) operating in the Philippines must: Register with the SEC and obtain a CASP license, Establish a stock corporation registered with the SEC, Employ at least four staff members who are residents of the Philippines and Meet the SEC’s minimum capital requirements.
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However, failure to comply with these provisions may result in investigations, penalties, and possible revocation of licenses.
The proposed framework includes measures to address cybersecurity threats and money laundering risks. CASP license holders are required to align their systems with the National Cybersecurity Plan and undergo regular audits and system reviews to stay resilient against emerging threats.
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For firms planning to conduct public offerings, the draft framework mandates the submission of a comprehensive disclosure document to the SEC. This document must be published on the firm’s website and social media platforms at least 30 days before the offering.
The SEC retains the authority to investigate firms suspected of violating the CASP rules. Potential sanctions include fines, cease-and-desist orders, or revocation of the CASP license.
The release of this draft follows an earlier announcement by SEC Chair Emilio B. Aquino in May 2024. At that time, the SEC promised to roll out comprehensive guidelines for cryptocurrency activities to regulate the growing market. Notably, the SEC previously banned Binance from operating in the country without a license, highlighting the urgency for regulatory measures.