The Philippines’ Securities and Exchange Commission releases comprehensive regulations for crypto-asset service providers, requiring registration, disclosures, and stricter compliance to protect investors.
New Framework Mandates Licensing, Transparency, and Capital Requirements for CASPs
The Securities and Exchange Commission (SEC) of the Philippines has issued a comprehensive regulatory framework for crypto-asset service providers (CASPs), marking a significant step in the country’s effort to govern the fast-evolving digital asset space.
The new rules, officially released at the end of May, define a crypto asset as a cryptographically secured digital representation of value or rights. These assets rely on a distributed ledger or similar technology to validate and secure transactions, and can be stored, transferred, or traded electronically. Crypto-asset securities, meanwhile, are identified as those assets offered as securities under the Securities Regulation Code (SRC).
A CASP is now formally recognized as any business entity that offers or provides one or more crypto-asset services, including operating a digital platform that delivers such services. The scope of the regulation extends not only to direct providers but also to third-party entities involved in the marketing of crypto assets and services.
The SEC, under this new regime, is empowered to supervise and regulate the operations of CASPs through requirements that include registration, licensing, and mandated disclosures. These rules apply to all CASPs offering services in the country, with emphasis on full transparency around the promotion and offering of crypto assets.
Under the guidelines, crypto assets that are considered financial products or securities must not be sold or distributed without the necessary disclosure documents or registration statements, duly filed with and approved by the SEC. Furthermore, any individual or entity engaged in marketing or soliciting investments in crypto assets must be registered as a corporation and hold appropriate licenses from regulators such as the SEC and Bangko Sentral ng Pilipinas.
Educational content “made in good faith and purely for educational purposes” will not be treated as marketing under the rules. However, for actual offerings, disclosure documents must be submitted to the SEC and made public at least 30 days before the commencement of any promotional or sales activities.
These documents must comprehensively detail the issuer and offeror’s identity, the crypto asset’s key features, risks, and benefits, and the underlying technology enabling the asset.
Initial coin offerings (ICOs) are also covered under the new regulations when they can be classified as security sales under the SRC and relevant SEC issuances.
To operate legally, CASPs must be registered corporations with a minimum paid-up capital of ₱100 million in cash or property, excluding crypto assets. A physical office that is appropriately staffed during business hours is also required.
The initial application comes with a filing fee of ₱50,000. In addition, CASPs must pay an annual supervision fee based on their gross revenue from the previous year.
Once registered, CASPs must maintain operational reports that detail the number of active users and daily trading activity—including the number of trades, assets traded, and settlement values.
Violations of the rules could lead to imprisonment for one to five years or fines ranging from ₱50,000 to ₱10 million.
