The Philippine Securities and Exchange Commission (SEC) has introduced extensive rules governing crypto-assets, covering disclosures, public offerings, trading, and marketing activities.
The regulations aim to enhance investor protection and promote transparency in the burgeoning digital asset market.
Under the new guidelines, crypto-asset offerings must submit a disclosure document to the SEC at least 30 days before any marketing activity or public sale.
The document must detail the offeror, issuer, key features, risks, and underlying technology of the crypto-asset, along with clear statements highlighting potential risks, including loss of value and limited transferability.
Crypto-assets classified as securities require a registration statement approved by the SEC before they can be offered publicly. Initial coin offerings (ICOs) fall under this rule if deemed to involve the sale of securities, as defined by the Securities Regulation Code (SRC).
Entities offering or trading crypto-assets must adhere to anti-money laundering (AML) laws and SEC reporting requirements. The SEC emphasized that non-compliance could lead to fines, suspension, or revocation of licenses.
The rules also prohibit market manipulation, insider trading, and dissemination of false or misleading information. Marketing activities must accurately disclose risks and avoid misleading representations. Unauthorized individuals or entities are barred from offering or promoting crypto-assets.
Crypto-Asset Service Providers (CASPs) are required to adopt cybersecurity frameworks, maintain effective systems to detect and prevent market abuse, and ensure compliance with AML regulations. The SEC retains authority to audit, investigate, and impose penalties on non-compliant entities.
Penalties for violations include fines ranging from PHP 50,000 to PHP 10 million per infraction and imprisonment of up to five years for individuals. Corporations may face revocation of licenses, with directors and officers held personally liable for breaches.
The new regulations take effect 30 days after publication in two newspapers of general circulation, underscoring the Philippine government’s commitment to fostering a secure and transparent crypto-asset ecosystem.
The Commission requests all interested parties to comment on the draft proposal on the issuance of the “SEC Rules on Crypto-Assets Service Providers”.