Philippine SECs official breaks down new crypto rules??
The Philippines’ Securities and Exchange Commission (SEC) issued regulations for crypto service providers on 30 May. The government now requires all entities offering crypto asset services to register and obtain a crypto asset service provider (CASP) licence. Requirements include a paid-up capital of P100 million ($1.8 million), a business plan, risk disclosures, and a clear corporate purpose tied to digital assets.
Speaking at the Philippine Blockchain Week, Atty. Paolo Ong, Assistant Director of the SEC, stated that the goal of the new guidelines is not to disrupt existing operations but to ensure proper oversight while supporting local ventures. “The point of the rules is actually to support local players and go after those unregistered ones,” Ong stated.
Ong explained that the SEC worked with the Bangko Sentral ng Pilipinas (BSP) during the drafting stage. “We intend under the rules to be frictionless for current VASP licences,” Ong said. He added that reporting requirements will mirror those already required by the BSP, with some additions depending on the nature of the activities.
Registration and segregation of funds are key
Ong outlined the essential requirements for applicants seeking a CASP licence. “The number one requirement for us is the registration in the Philippines,” he said. This includes being a duly registered stock corporation and meeting the minimum capital requirement, excluding crypto assets.
Another major condition is the segregation of customers and exchange funds. “We see that learning from the collapse of other exchanges, that is a key measure to protect investors’ funds,” Ong said. Additionally, the SEC wants consumers to understand the risks of crypto before engaging. “We’d like to give Filipinos access to these products, but our requirement is to make them knowledgeable of the risks involved.”
Guidelines for marketers, content creators, and educators
Under the new rules, anyone engaged in marketing crypto assets or services must be a registered corporation with a primary licence from the SEC. Ong clarified, “The standard for us for marketing of crypto assets in the Philippines would be simply just a Philippine registration of a corporation.”
For educators and content creators, the rules do not explicitly prohibit receiving compensation, provided the activity is conducted in good faith. “As long as you are educating and acting in good faith, we don’t prohibit getting something in return,” Ong said. However, he noted that the evaluation would be “case by case.”
Ong also explained that pushing audiences toward specific platforms, especially if those platforms turn out to be scams, could trigger enforcement action. “The enforcement team would really look at so-called educators that are pushing their audience into a specific platform,” Ong warned.
On financial advice and regulatory gaps
Currently, there is no formal licensing regime for financial advisors in either crypto or traditional markets. “We don’t have the licensing for financial advisors, even in traditional markets,” Ong acknowledged this gap. He suggested that individuals or firms offering advice consider joining the SEC’s sandbox programme for experimental regulation.
Enforcement will be assertive but adaptive
With the new rules in place, Ong said enforcement efforts will become more proactive. “It will give more teeth to our enforcement team,” he said. The SEC plans to focus on unregistered foreign platforms and scammers operating in the country.
At the same time, Ong stressed that the guidelines are not final. “We believe that the rules will not have a final form yet. It should continue to develop, and we are always open to feedback,” he said. The industry is encouraged to reach out via the SEC’s fintech email or through intermediaries to share their input.
Fines under the new rules
Failure to comply with the new CASP rules will result in escalating fines, ranging from P50,000 ($895) for the first offence to PHP200,000 ($3,500) and cancellation of registration for repeated violations. The SEC stated that its objective is to allow consumers to deal only with authorised intermediaries, considering the rising number of fraud cases in the country’s crypto space.
“We are not here to stifle innovation,” Ong concluded. “We just want to make sure it happens within the rules.”
