The Philippines Securities and Exchange Commission (SEC) seeks to bring cryptocurrencies under its scope and beef up its authority over the local cryptocurrency industry under new draft rules.
According to a Jan. 25 report in a local media outlet, the securities regulator put forward for public comment draft rules relating to financial products and services, which also cover cryptocurrencies and digital financial products.
The SEC said in a statement the draft rules will operationalize a newly signed law and give it “rule-making, surveillance, inspection, market monitoring, and more enforcement powers.”
The guidelines expand the definition of a security to include “tokenized securities products” or other financial products using blockchain or distributed ledger technology (DLT).
Other financial products, including digital financial products and services relating to those accessed and delivered through digital channels along with their providers, will also come under the SEC’s remit.
The ability to enforce securities regulations is similarly expanded. The SEC could restrict service providers from collecting excessive interest, fees, or charges.
The regulator would also have the power to disqualify or suspend directors, executives, or any other employee found to violate the laws. It could also suspend a firm’s entire operation.
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.
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The latest development marks a continuation of the regulator’s heavy crackdown on cryptocurrencies.
In late December 2022, the SEC warned the public against using unregistered exchanges operating within the country, claiming a number of exchanges were “unlawfully allowing” Filipinos to access their platforms.
In August 2022, the Philippine central bank said it was taking a three-year break from accepting new virtual asset service provider applications, with the process expected to reopen on Sept. 1, 2025.