The Philippines has enacted new regulations for cryptocurrency services aimed at streamlining the licensing process and increasing oversight of the crypto market.
Key Components of the New SEC Crypto Regulation
All crypto asset service providers in the Philippines are now required to obtain a CASP license and adhere to strict disclosure requirements.
The disclosure includes information on asset ownership, risks, and operations; crypto companies are required to submit these documents at least 30 days before beginning marketing.
For market entry, the SEC has set a minimum paid capital requirement of PHP 100 million. However, there is also a mechanism for smaller companies to apply.
Furthermore, crypto companies seeking to provide services are required to have a physical office in the Philippines and pay an initial PHP 50,000 filing fee. An additional annual supervision fee on revenue will be levied by officials.
The SEC and the Anti-Money Laundering (AML) council will monitor CASP to ensure safety, professionalism, KYC policy compliance, and fair access for investors.
Penalty for Non-Compliance
The bill was initially issued on May 30th and took effect on June 12. It states that if a token/crypto behaves like a financial product or security under federal law, it is subject to SEC regulation.
Thus, the SEC holds the authority to suspend or revoke the CASP license for noncompliance. Guilty CASPs will face a fine of up to PHP 100 million and imprisonment for up to five years.
Challenges in Implementing The New Crypto Regulations
Luis Buenaventura, head of crypto finance at super-app GCash, noted that there will be substantial challenges in implementing the new CASP rules.
"Regulation is rarely perfect on day one, but as long as the regulatory authority takes a progressive approach and stays open to refining the framework over time, then I think this signals the Philippines," said Nathan Marasign, Partner at MLaw Office.
The new cryptocurrency regulation in the Philippines aims to enhance sector security and trust, yet the implementation of these rules presents certain challenges.
