The Securities and Exchange Commission (SEC) Philippines has recently released a draft of its long-awaited cryptocurrency regulatory framework. This initiative invites stakeholder feedback, aiming for comprehensive insights before the deadline of January 18, 2025. The draft, titled SEC Rules on Crypto-Assets Service Providers (CASP Rules), encompasses a broad range of crypto trading activities, setting clear stipulations for firms seeking to enter the burgeoning market.
With the rapid growth of cryptocurrency in the Philippines, the SEC underscores the necessity of establishing a robust regulatory framework that promotes fairness, efficiency, and transparency across this evolving sector. The framework is designed to ensure that both new market participants and existing players adhere to high standards of conduct.
Among the key provisions detailed in the draft, crypto service providers will be required to:
- Register with the SEC and obtain a CASP license for operation in the Philippines.
- Maintain a minimum of four staff members residing within the country.
- Establish a stock corporation registered with the SEC.
- Meet the SEC’s minimum capital requirements.
This proposed regulatory framework also includes stringent measures to safeguard against risks associated with money laundering and cybersecurity threats. CASP license holders must align their systems with the National Cybersecurity Plan and undergo regular audits, ensuring compliance with security standards to combat emerging threats effectively.
Furthermore, companies aiming to offer crypto assets to the public must prepare a detailed disclosure document to be submitted to the SEC. This document must elucidate the following critical aspects:
- Information about the crypto asset offeror and issuer.
- The underlying technology employed.
- Rights and obligations associated with the crypto asset.
- Potential risks, alongside advisories regarding possible loss of asset value.
- A dedicated section preventing market manipulation, insider trading, and illicit information disclosure.
The SEC has proactively invited inputs from stakeholders, reflecting its commitment to developing a regulatory landscape that is both inclusive and responsive to market needs. The insights gathered will play a pivotal role in shaping the final framework.
In previous announcements, SEC Chair Emilio B. Aquino emphasized the urgency of implementing regulatory guidelines to oversee crypto trading activities. This proactive approach not only aims to safeguard investors but also to attract legitimate businesses to engage in the evolving digital asset ecosystem.
As the deadline for feedback approaches, industry participants and stakeholders are encouraged to review and respond to the draft regulations. The SEC’s efforts mark a significant step forward as the Philippines seeks to position itself as a leader in the regulated cryptocurrency space, promoting both innovation and compliance.
