Philippines Announces New Cryptocurrency Regulations
The Philippines has announced new regulations to govern crypto assets. According to the Cagayan Economic Zone Authority (Ceza), a government regulator, the new regulations cover areas around the acquisition of cryptocurrencies, including utility and security tokens. The aim is to effectively regulate the crypto industry while safeguarding investor interests and promoting innovation, Ceza explained.
New Framework Aims to Protect Investors and Promote Innovation
Dubbed the Digital Asset Token Offering (Dato) regulations, the guidelines require the creators of all crypto assets, in relation to initial coin offerings, to provide clear offer documents carrying relevant details of the issuer, project, and accompanying advice and certification of experts, according to a report by Vietnamese English daily Vietnam News.
Tokens should be listed on the licensed Offshore Virtual Currency Exchange (OVCE), a special exchange set up for this purpose. Participants are required to have confirmed arrangements with Ceza-accredited wallet providers and custodians, said the regulator, which crafted and sanctioned the new framework.
The rules have been broken down into three levels of digital asset offerings, with the first level, tier one, covering assets and investments not exceeding $5 million with payment made in digital tokens. Digital assets covered under tier two range between investments worth $6M to $10M, while tier three covers investments exceeding $10 million.
Raul Lambino, chief executive officer of Ceza, said the Dato framework is not targeted at stifling growth in the cryptocurrency sector, but to protect investors and promote innovation.
“We aim to provide a clear set of rules and guidelines that will boost innovation while also ensuring proper compliance by actors in the ecosystem,” Lambino was quoted as saying. “We hope that these set of regulatory innovations will promote blockchain and crypto adoption by institutional investors and the financial system.”
Self-Regulatory Body to Enforce Compliance
The government-owned regulator said it will be working in partnership with the Asia Blockchain and Cryptocurrency Association (Abaca), a so-called self-regulatory industry representative body, whose obligations include executing and enforcing the regulations. Abaca will also administer a code of conduct among its members, reporting to Ceza any breach or violation relating to the offshore virtual currency exchange regulations.
“The safeguards built into Ceza’s rules and system will lead to greater investor protection and transparency. The involvement of DA agents and experts bring in competent and neutral third parties into the process to help ensure issuers are truthful and accurate,” Lambino detailed.
Ceza, which to date has given 19 companies the green light to operate cryptocurrency exchanges as it moves to develop a financial technology economic zone, further indicated that the new rules will also encourage innovators to use new technologies responsibly. Ceza emphasized that collaboration with local fintech firms and industry players will help the government gain insights and keep up to date with innovations on emerging markets.
Juanita Cueto, chairperson of Abaca, said: “The SRO model allows industry players to police their own ranks, while also promoting and protecting the interests of cryptocurrency investors. The rules will remain stringent in assessing the ethics and integrity of companies eyeing to launch Digital Asset Token Offerings.”
Across the world, government agencies are targeting crypto investors, not only with taxes, but mandatory registration and full disclosure rules. This new wave of regulation poses a contradiction given that some of cryptocurrency’s strongest characteristics have traditionally been privacy and autonomy.
Some of the regions that have recently weaponized their law books to meter aspects of virtual currencies include Malaysia, Australia, Japan, the EU and the U.S.
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