- In the draft, the given rules describe crypto-assets as virtual representations of value utilizing distributed ledger technology.
- Organizations that plan to provide crypto-assets to the public must give extensive disclosure documents to the Securities and Exchange Commission.
- The document should include information about the profile of the offeror, the basic technology, probable risks, and alerts regarding the probable loss of value.
The Securities and Exchange Commission of the Philippines has recently issued a draft report named SEC Rules on Crypto-Assets Service Providers (CASP Rules). The draft is open for public input.
It includes a regulatory substructure for the country’s rapidly growing crypto sector, which has witnessed quick growth in the past few years. The Philippines has grabbed the attention of many investors as it is rapidly adopting cryptocurrency, mainly boosted by the average age group of 25 years.
Rapid crypto adoption in the country
In the current scenario, Crypto-assets have around 562 million users around the globe, and the Securities and Exchange Commission of the Philippines has targeted direct risks like fraud and market manipulation. Also, at the same time, encourages an environment for revolution.
In the draft, the given rules describe crypto-assets as virtual representations of value utilizing distributed ledger technology. Under this new framework, regulation of activities like trading, custody, and public offerings of these assets will be done.
It also mentions that service providers have to register with the Commission to secure a license, meeting severe standards that comprise compliance with the Financial Products and Services Consumer Protection Act (FCPA). Some other things that are outlined are minimum capital needs and other regulatory obligations.
The disclosure document
Organizations that plan to provide crypto-assets to the public must give extensive disclosure documents to the Securities and Exchange Commission not exceeding the time limit of 30 days before marketing.
The document should include information about the profile of the offeror, the basic technology, probable risks, and alerts regarding the probable loss of value. The draft rules of the SEC also highlight cybersecurity as well as anti-money laundering actions.
Service providers are also asked to coordinate their systems with the National Cybersecurity Plan and go through regular audits to make sure that there is resilience against appearing threats.
Some more areas that are highlighted in the draft are anti-money laundering laws, insider trading prevention, and anti-market manipulation practices. As mentioned the draft is open for public input, and feedback sharing will be open till January 18, 2025.
