SEC Philippines Tightens Crypto Rules to Police Local Crypto Industry

• The Philippines Securities and Exchange Commission (SEC) is proposing tighter regulations on crypto, crypto companies and other blockchain-based financial products.
• These proposed rules would give the SEC more enforcement powers, including the ability to restrict service providers from collecting excessive fees, disqualify or suspend employees found to violate laws, and suspend an entire firm’s operations.
• These latest developments follow a recent warning by the SEC against using unregistered exchanges operating within the country.

Philippines Securities Regulator Seeks More Authority

The Filipino securities regulator is seeking to enact tighter rules on crypto, crypto companies and other financial products using blockchain technology. The Philippines Securities and Exchange Commission (SEC) has put forward for public comment draft rules relating to financial products and services, which also cover cryptocurrencies and digital financial products.

Details of Proposed Rules

The guidelines expand the definition of a security to include „tokenized securities products“ or other financial products using blockchain or distributed ledger technology (DLT). The ability to enforce securities regulations is similarly expanded. The SEC could restrict service providers from collecting excessive interest, fees, or charges; disqualify or suspend directors, executives, or any other employee found to violate the laws; and even suspend a firm’s entire operation.

Law Allows Regulators To Create Rules

Local laws allow the SEC to create its own rules for applying legislation in its jurisdiction, with the central bank of the Philippines and the country’s insurance regulator also allowed to create rules to supplement related laws.

Crackdown On Unregistered Exchanges

These latest developments mark a continuation of the regulator’s heavy crackdown on cryptocurrencies. In late December 2022, the SEC warned citizens against using unregistered exchanges operating within the country claiming that they were “unlawfully allowing” Filipinos to access their platforms.

Conclusion

The proposed new rules would give Filipino regulators greater authority over cryptocurrency related activities in their jurisdiction while at same time protecting investors from harm caused by unregulated exchanges operating unlawfully in their region.