The Philippine Securities and Exchange Commission (SEC) has announced a new set of regulations to strengthen oversight in the country’s crypto sector.
The SEC stated that “Rules on Crypto-Assets Service Providers (CASP Rules)” are now open to public input. These regulations address fraud and market manipulation risks while aiming to ensure investor protection and support innovation within the country’s digital asset market.
The Philippines has become one of the leading countries in crypto adoption, with a young and tech-savvy population. According to reports, the country’s median age is 25, a profile that has helped fuel the growing use of digital currencies. Further, the country ranked top in global crypto adoption, with over 562 million users worldwide.
What are the Key Provisions of the New Regulations?
The proposed guidelines state that crypto-asset sales must provide a detailed information document to the SEC at least 30 days before any marketing or public sale begins. This document must cover information about the crypto-asset, including details of the offeror, issuer, potential risks, and underlying technology.
Under these new rules, crypto-assets deemed as securities will require SEC approval through a registration statement before being offered publicly. This applies to Initial Coin Offerings (ICOs) if the asset is deemed a security according to the Securities Regulation Code (SRC).
Read also: Philippines SEC Orders Binance from App Removal From App Stores
Crypto Providers Face Strict Compliance Rules
The SEC also requires entities offering or trading crypto-assets to adhere to strict anti-money laundering (AML) regulations and follow SEC reporting standards. The consequences for non-compliance are severe, with fines between PHP 50,000 to PHP 10 million (approximately $880 to $176,000), while individuals may face up to five years in prison.
Additionally, Crypto-Asset Service Providers (CASPs) must implement strong cybersecurity protocols and effective systems to identify and avoid market misuse.
The SEC has also highlighted its authority to remove crypto assets from exchanges when necessary to protect investors. Under the new rules, activities like futures trading, margin trading and derivatives that involve crypto-assets will require explicit SEC approval.
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