Source: Crowd Fundinsider; Compiled by Tao Zhu, Golden Finance
The Philippine Securities and Exchange Commission (SEC) has issued comprehensive rules for the management of cryptocurrency assets, covering disclosure, public offerings, trading, and marketing activities.
These regulations aim to strengthen investor protection and promote transparency in the burgeoning digital asset market.
According to the new guidelines, cryptocurrency issuers must submit disclosure documents to the SEC at least 30 days prior to any marketing activities or public sales.
The document must detail the issuer of the cryptocurrency, the issuer, key features, risks, and underlying technology, as well as a clear statement highlighting potential risks, including loss of value and limited transferability.
Cryptocurrencies classified as securities must obtain a registration statement approved by the U.S. Securities and Exchange Commission to be publicly offered. If an initial coin offering (ICO) is considered to involve the sale of securities, it falls within the scope defined by the Securities Regulation Code (SRC).
Entities issuing or trading cryptocurrency must comply with anti-money laundering (AML) laws and the reporting requirements of the U.S. Securities and Exchange Commission. The SEC emphasizes that non-compliance may lead to fines, suspension, or revocation of licenses.
These rules also prohibit market manipulation, insider trading, and the dissemination of false or misleading information. Marketing activities must accurately disclose risks and avoid misleading statements. Unauthorized individuals or entities are prohibited from issuing or promoting cryptocurrencies.
Cryptocurrency service providers (CASPs) must adopt a cybersecurity framework, maintain effective systems to detect and prevent market abuse, and ensure compliance with anti-money laundering regulations. The SEC reserves the power to audit, investigate, and penalize non-compliant entities.
Violations will incur penalties ranging from 50,000 to 10 million Philippine pesos per violation, with individuals facing up to five years in prison. Companies may face license revocation, and directors and executives will be held personally liable for violations.
The new regulations will take effect 30 days after being published in two major newspapers, highlighting the Philippine government's commitment to establishing a safe and transparent cryptocurrency ecosystem.
The Commission requires all parties involved to comment on the draft proposal for the 'SEC Cryptocurrency Service Provider Rules.'