The Securities and Exchange Commission (SEC) is putting together a new set of proposed regulations that would beef up its authority over the local cryptocurrency industry and put digital money under its scope.
In a media advisory, the SEC said that it has come up with new draft rules on Digital Asset Exchange (DAE) in an effort to encourage further “investments and active public participation in the capital market, foster good governance, and ensure the protection of investors.”
Digital Asset Exchange (DAE) is defined as an organized marketplace that brings together buyers and sellers and executes trades of securities. This includes buying/selling digital assets with fiat (fiat/digital asset pairing) as well as buying/selling digital assets with other digital assets (digital asset/digital asset pairing). They can be viewed as an online marketplace for the entire digital asset network.
“These rules shall encompass cryptocurrencies as well as digital financial products,” the advisory said.
The SEC further claimed that the proposed regulations would make a recently passed bill more effective and provide it with rule-making, surveillance, inspection, market monitoring, and greater enforcement authorities.
New recommendations
In the Notice, one of the recommendations that were made is to broaden the definition of security so that it would now include “tokenized securities products,” as well as other financial products that make use of blockchain or distributed ledger technology (DLT).
The SEC will likewise be held responsible for regulating other types of financial goods, and this includes digital financial products and services related to those that may be accessed and supplied via digital channels, as well as the suppliers of such products and services.
At the same time, the regulator’s power to enforce rules governing securities will also be increased.
The SEC will now have the authority to place limits on the amount of interest, fees, and charges that service providers may collect.
The regulator would also have the authority to remove from their positions any directors, executives, or other employees who were found guilty of violating the law. Likewise, the SEC may stop the operations of any company if they fail to follow the rules.
The securities regulator has since put out for public comment the draft regulations pertaining to Digital Asset Exchange (DAE), which would now include cryptocurrencies as well as digital financial products.
Harsh crackdown on cryptocurrencies
Before the end of December last year, the SEC issued a public warning against those utilizing unregistered exchanges that were functioning inside the country. The commission also noted that there’s an increasing number of exchanges today that have been “illegally” permitting Filipinos to use their platforms.
According to experts, this recent turn of events signifies a continuation of the harsh crackdown that the country’s insurance regulator is now exerting on cryptocurrencies.
The SEC, after all, is authorized by local laws to develop its own guidelines for the application of laws within its jurisdiction. In addition, both the Bangko Sentral ng Pilipinas (BSP) and the SEC are authorized to develop guidelines that can be used for the implementation of related laws.
For its part, the Philippine central bank has announced that it will stop accepting new applications from Virtual Asset Service Providers (VASPs) in the next three years.
The Philippine central bank said that it will only resume accepting applications by September 1, 2025.