An advertisement of Bitcoin, one of the cryptocurrencies, is displayed on a building in Hong Kong, on Nov. 18, 2021. —File photo from the Associated Press
MANILA, Philippines — The widespread adoption of cryptocurrency as an alternative financial product in the country has pushed the Securities and Exchange Commission (SEC) to craft guidelines covering the sector’s service providers, providing another layer of protection for investors.
The corporate watchdog on Dec. 20, 2024, published its draft rules on crypto asset service providers (CASPs), or entities that offer or engage in the provision of one or more crypto asset services.
This can be through the creation of digital platforms that can provide these products, according to the SEC.
Under the proposed rules, which the public may comment on until Jan. 18, a person or company may only provide crypto asset services in the country after securing a license from the SEC.
Among the requirements for a CASP to be qualified for registration is that it must be a stock corporation registered with the SEC, have at least four staff members based in the Philippines, meet the minimum capital and submit a complete application for authorization to the SEC.
READ: Philippines ranks 2nd in cryptocurrency ownership globally — study
Protecting consumers
“The draft rules take into account the growth and development of new crypto asset markets, services and business models, as the commission seeks to establish an affirmative legal framework to provide protection against consumer harms and systemic risks,” the SEC said in a statement on Wednesday.
“It also seeks to provide consumers the choice of engaging in crypto asset activity with licensed and authorized intermediaries,” it added.
As with other securities sold and traded in the Philippines, crypto assets may only be offered to the public after the qualified CASP has filed with the SEC a disclosure document containing relevant information, including key features and risks, and rights and obligations attached to the crypto assets.
Initial coin offerings, or raising funds by offering a unique digital “coin” or “token” to the public, may only be done after the CASP has secured an approved registration statement.
Data from global blockchain analysis firm Chainalysis show that in October last year, the Philippines ranked eighth in the world in terms of cryptocurrency adoption.
A separate report by international cryptocurrency payment gateway Triple-A found that in 2022, there were nearly 7 million Filipinos, or around 6.13 percent of the population, who owned cryptocurrency assets.