Cryptocurrency owners and traders in the Philippines may have to wait longer before the Securities and Exchange Commission (SEC) can release proper cryptocurrency regulations.
The news came after the country’s chief financial regulator announced the postponement of the much-awaited release of a legal framework for the industry.
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SEC wants to remain cautious about Crypto after FTX fiasco
Aquino added, however, that the work on the guidelines is ongoing, and that the legal framework could still be released in 2023 after the regulator has studied the reasons behind the fall of the Bahamas-based crypto exchange.
“We were supposed to bring it out late last year, but we don’t want people to get burned,” Aquino said. “The issuance of digital assets is a form of capital raising, and we have to study that because, like in FTX, they were transferring billions left, right, and center.”
In November last year, Sam Bankman-Fried, CEO of FTX, announced his resignation via Twitter after being charged with fraud, conspiracy, money laundering, and violation of campaign finance law. His resignation led to the eventual collapse of the cryptocurrency derivatives exchange after a bank run.
The events around the collapse and the huge amount of losses it brought to investors, estimated to be in billions of dollars, forced the Philippines to tighten rules on digital assets before having a legal framework in place.
Gemini, Binance face regulatory pressure in PH
In May this year, the SEC has also issued a public advisory against investing in Gemini, a crypto derivatives platform. In a regulatory notice, the country’s finance regulator stated that the newly launched platform markets and offers derivative products that can be categorized as securities under local laws.
The problem is, Gemini did not seek any registration with the SEC to launch its platform here.
“GEMINI TRUST COMPANY, LLC. is not registered with the Commission and OPERATES WITHOUT THE NECESSARY LICENSE AND/OR authority to solicit, accept or take investments/placements from the public nor to issue securities,” the regulatory notice stated.
“GEMINI TRUST COMPANY, LLC’s lack of prior registration with the Commission makes their activities of offering and/or selling securities in the form of derivatives ILLEGAL in violation of the provisions of the [Securities Regulation Code].”
The regulatory notice further said that Gemini Trust Company, the parent company behind its namesake, was not registered with the commission and operated without the necessary license or authority. Gemini was found to have launched the derivatives exchanges outside the US, and the Philippines was among the countries where the platform eventually went live.
In a related development, the SEC also reported that Binance, currently the largest cryptocurrency trading platform by volume, was planning to acquire at least two licenses in the Philippines — the virtual asset service provider (VASP) and the electronic money issuer (EMI) licenses.