Philippines SEC Plans to Regulate Cryptocurrencies, ICOs

The Philippines’ Securities and Exchange Commission said on Monday it is crafting rules to regulate cryptocurrency transactions to protect investors and reduce the risk of fraud.

The regulation, which will cover issuance and registration of cryptocurrencies, is expected to be finalized this year, said Emilio Aquino, SEC commissioner in charge of enforcement and investor protection, according to Reuters.

Aquino stated at a press conference:

"We want to come up with our own set of regulations. You have to be extra careful how investors in this new space are protected."

Aquino further said that the regulations are expected to be finalized this year and will include the issuance and registration of cryptocurrencies. Guidelines on cybersecurity of cryptocurrency markets and investors' financial literacy and eligibility are expected to be included in the regulation.

"Unfortunately, there have been a lot of cases where ICO promoters vanish into thin air. We don't want that to happen here," Aquino stated.

Local news source Philstar Global also suggested that ICOs may have to register with the SEC since it considers cryptocurrencies to be securities.

Earlier this month, the SEC warned the public to take the necessary precautions in dealing with ICOs, and also filed a cease-and-desist order against four companies and an ICO operator citing securities registration regulations.

Elsewhere, Chinese authorities outlawed ICOs last September, saying they were illegal under domestic law.

"It is a kind of non-approved illegal open fund-raising behavior, suspected of illegal sale tokens, illegal securities issuance and illegal fund-raising, financial fraud, pyramid schemes and other criminal activities," a joint statement read at the time.

And, in September 2017, the South Korean Financial Services Commission prohibited local companies from taking part in ICOs, which it described as overly speculative and constituting a "violation of the capital market law."

Philippines flag image via Shutterstock