The Philippines Securities and Exchange Commission (SEC) has released a draft regulatory framework for cryptocurrency activities in the country. This move is in response to the rapid growth of the crypto sector and aims to ensure market integrity and consumer protection.
The draft regulatory framework, titled "SEC Rules on Crypto-Assets Service Providers (CASP Rules)," outlines the requirements for obtaining an SEC-issued license and provides guidelines for market activities and public offerings related to crypto assets.
Under the proposed regulations, crypto service providers will need to register with the SEC and obtain a CASP license to operate legally in the Philippines. The SEC emphasizes the importance of establishing a robust regulatory environment to foster the development of crypto markets and services.
The SEC highlights the need for risk mitigation strategies, particularly regarding money laundering and cybersecurity threats. CASP license holders will be expected to align their operational systems with the National Cybersecurity Plan and undergo regular audits.
For companies planning to conduct public offerings of crypto assets, the SEC has established comprehensive disclosure requirements. These requirements include submitting a detailed disclosure document to the SEC and making it publicly available at least 30 days before the offering date.
The disclosure document should provide critical information about the offeror, issuer, underlying technology, and rights and obligations associated with the asset. It should also highlight potential risks and include warnings about the possibility of loss in value.
The SEC's initiative to regulate cryptocurrency trading activities is part of a broader strategy to enhance oversight in the financial sector. The draft framework is expected to have significant implications for local and international crypto firms operating in the Philippines, creating a more stable and secure environment for crypto trading.
The feedback period for stakeholders will play a crucial role in shaping the final version of the regulations. Stakeholders have until January 18, 2025, to provide feedback on the draft regulatory framework.