Source: Crowd Fundinsider; Compiled by: Tao Zhu, Golden Finance

The Philippine Securities and Exchange Commission (SEC) has introduced extensive crypto asset management rules covering disclosure, public offerings, trading and marketing activities.

These regulations are designed to enhance investor protection and promote transparency in the booming digital asset market.

Under the new guidelines, crypto asset offerings must file disclosure documents with the SEC at least 30 days before any marketing activity or public sale.

The document must detail the issuer, issuer, key features, risks and underlying technology of the crypto-asset, as well as a clear statement highlighting potential risks, including loss of value and limited transferability.

Cryptoassets classified as securities require a registration statement approved by the SEC before they can be offered publicly. If an Initial Coin Offering (ICO) is deemed to involve the sale of securities, it falls within the definition of the Securities Regulation Code (SRC).

Entities that issue or trade cryptoassets must comply with anti-money laundering (AML) laws and SEC reporting requirements. The SEC emphasizes that failure to comply may result in fines, suspension or revocation of licenses.

The rules also prohibit market manipulation, insider trading and the dissemination of false or misleading information. Marketing campaigns must accurately disclose risks and avoid misleading statements. Unauthorized individuals or entities may not issue or promote cryptoassets.

Cryptoasset Service Providers (CASPs) must adopt a cybersecurity framework, maintain effective systems to detect and prevent market abuse, and ensure compliance with anti-money laundering regulations. The SEC retains the authority to audit, investigate and penalize non-compliant entities.

Penalties for violations include fines ranging from Php 50,000 to Php 10 million per violation and individuals can be jailed for up to five years. Companies may face license revocation, and directors and officers may be held personally liable for violations.

The new regulations took effect 30 days after being published in two high-circulation newspapers, highlighting the Philippines’ commitment to building a secure and transparent crypto-asset ecosystem.

The Commission is requesting comments from all interested parties on the draft proposal to issue "SEC Crypto-Asset Service Provider Rules."