The Philippines’ primary securities regulator has confirmed work toward crafting regulations for cryptocurrency transactions and initial coin offerings (ICOs) in order to reduce fraud risks and protect investors
Speaking at a news conference on Monday, Philippines’ Securities and Exchange Commission (SEC) commissioner Emilio Aquino said the authority will outline regulations that will cover the issuance and registration of cryptocurrencies will be finalized this year. The regulations are currently at a “drafting stage”, Aquino said.
In quotes reported by Reuters, the SEC official added:
Specifically, the regulation will introduce guidelines on the cybersecurity posture of cryptocurrency markets, the eligibility of ICO issuers accounting for the technology used and the operators behind it, as well as the financial literacy of investors, Aquino revealed.
Most of all, the SEC chief insists that the regulatory move is to ensure investor safety while curbing fraud. “Unfortunately, there have been a lot of cases where ICO promoters vanish into thin air,” Aquino added. “We don’t want that to happen here.” As things stand, the securities regulator is yet to grant license or approval to an ICO operator and is reportedly investigating unverified, unlicensed sellers currently.
As reported by the Nikkei, a cease-and-desist order was issued against an ICO last week after its operators announced their offering without the regulator’s approval.
“The mindset of the commission has always been to foster innovation, but they need to register,” Aquino said in the news conference, stressing that the regulator was taking an accommodating approach to the cryptocurrency sector.
Earlier in January, the SEC warned the public to take the necessary precautions in dealing with ICOs, and also filed a cease-and-desist order against four companies and an ICO operator citing securities registration regulations.
Other countries, including China and South Korea, have moved to crack down on cryptocurrencies, while others, such as Indonesia, have issued stern warnings.
The Philippines, however, has kept “an open mind” for virtual currencies because the underlying technology could reduce the cost of financial transactions, such as remittances, Aquino said. The Philippine central bank has accredited at least two bitcoin exchanges.
Cryptocurrency transfers have become popular in the Philippines; it is one of the biggest markets for international transfers as so many of its citizens work abroad and send money home.
The $25 billion-plus annual remittances from the Philippines’ 10 million overseas workers are seen as an econimic lifeline for the $300-billion economy.