While the key aspect of crypto is that it is deregulated and not under the supervision of the government and central banks, the SEC has released rules and guidelines on crypto assets–and not everyone is going to be happy about it.

Under its rules and regulations, the SEC requires are crypto assets and securities to be registered before being sold or offered in the Philippines. While it contradicts crypto’s key aspect, the SEC explained under Memorandum Circular Nos. 4 and 5 that rules aim to protect Filipino investors and traders and improve market integrity amid continuous adoption.

This means that only SEC and BSP registered corporations may market and promote crypto assets, and that disclosures must also be filed with the SEC and published at least 30 days before any offering like initial coin offerings (ICOs). This rule also applies to third-party services, and the SEC requires registered corporations to follow anti-money laundering laws and maintain operational reports.

If that’s not enough, registered corporations should have a minimum paid-up capital of Php100 million in cash or property (crypto assets excluded), excluding crypto asset, along with a staffed physical office with regular business hours. They are also required to pay an initial filing fee of Php 50,000 on top of a supervision fee based on their gross revenue from the preceding year. Those who will violate SEC’s guidelines can be punished by up to 5 years of imprisonment or a fine of up to Php 10 million.

While we appreciate the SEC’s intent to protect investors from crypto scams, it remains to be seen how they can implement these rules and regulations properly. Many crypto traders will not like these, but if the SEC can show its true intent of protecting them, maybe these rules will help weed out the many crypto scams out there.