SEC issues regulations for crypto service providers
The cryptocurrency boom in the country—along with incidents of fraud and scams—has pushed the Securities and Exchange Commission (SEC) to issue guidelines specifically regulating the service providers of this asset class.
In a Memorandum Circular issued on May 30, the corporate watchdog said any entity offering or providing crypto asset services within the country would need to register with the SEC.
They are likewise required to secure a license as a crypto asset service provider (CASP) before they can officially operate.
Under the guidelines, the corporation needs to have a minimum paid-up capital of P100 million in cash or property, excluding crypto assets.
An entity wishing to be a CASP also needs to submit several documentary requirements, including: proof of being a duly registered stock corporation, with its primary purpose being explicitly related to digital asset services; a disclosure matrix detailing the risks involved in the operation of its platform; and a detailed business plan.
The SEC, however, may refuse, withdraw, terminate, suspend or revoke the authorization of any crypto asset services in cases where the CASP violates the rules and guidelines. This includes fraudulent sale, marketing and distribution of assets.
A CASP may likewise lose its registration if this has not been used within 12 months from the date of its issuance.
A P10,000 basic fine will be imposed on a CASP that fails to file reports, with an additional P500 per day of delay.
Any violation of the guidelines will result in a P50,000 fine for the first offense, P100,000 for the second offense and P200,000 for the third offense, along with the cancellation of registration.
Earlier, the SEC said its CASP rules were drafted to “provide consumers the choice of engaging in crypto asset activity with licensed and authorized intermediaries.”
