SEC issues rules on crypto-asset service providers
The Securities and Exchange Commission (SEC) is regulating the marketing, issuance, and trading of crypto-assets, as well as the registration and operation of crypto-asset service providers (CASPs) in the country as it seeks to balance the promotion of innovative securities and technology-based ventures while ensuring market integrity and investor protection.
The Commission on May 30 issued SEC Memorandum Circular Nos. 4 and 5, Series of 2025, providing for the SEC Rules on Crypto-Asset Service Providers (CASP Rules) and the SEC Guidelines on the Operations of Crypto-Asset Service Providers (CASP Guidelines), respectively.
The CASP Rules define a crypto-asset as “a cryptographically secured digital representation of value or of a right that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions that can be transferred, stored, or traded electronically.”
Crypto-asset securities are defined as “crypto-assets that are being offered as securities, as defined under Republic Act No. 8799, or the Securities Regulation Code (SRC).”
Meanwhile, a CASP is “a business entity that offers or engages in the provision of one or more crypto-asset services, including the operation of a digital platform that provides such services.”
Both the Rules and the Guidelines apply to all CASPs that are offering crypto-asset services, as well as third-party service providers who engage in the marketing of crypto-assets and crypto-asset services.
Crypto-asset registration
Crypto-assets may take the form of financial products, specifically investments, under Republic Act No. 11765, or the Financial Products and Services Consumer Protection Act (FCPA), or as crypto-asset securities which are securities, as defined under the SRC.
Thus, the SEC is empowered to regulate and supervise the conduct of CASPs by requiring the registration, licensing, and disclosures pertaining to crypto-assets, crypto-asset services, marketing of the aforementioned, and crypto-asset securities pursuant to the CASP Rules.
Crypto-assets and crypto-asset securities shall not be sold or offered for sale or distribution in the country without a disclosure document or registration statement, as the case may be, duly filed with and approved by the Commission, as provided by the SRC, the CASP Rules, and other issuances by the SEC.
Similarly, no person or entity shall engage in the marketing or inducement to purchase crypto-assets or crypto-asset services unless they are registered as a corporation and have obtained the necessary licenses from the concerned regulatory agencies, such as the SEC and Bangko Sentral ng Pilipinas.
Under the rules, educational content made in good faith and purely for educational purposes will not be qualified as marketing.
In relation to the offering of crypto-assets, disclosure documents must be filed by the offeror with the SEC and published on the platform’s website, social media account, and other means of communication not less than 30 days before any marketing activities or the actual offering is conducted.
The disclosure document shall include information about the issuer and offeror of the crypto-asset; key features, risks, and prospects of the crypto-asset; and an outline of the underlying technology, among others.
The CASP Rules also cover initial coin offerings (ICO) to the extent that such ICO can be characterized as a sale of securities as defined by the SRC, SEC issuances, and other relevant laws.
In addition, CASPs shall be considered as covered persons under the Anti-Money Laundering Act and are therefore subject to the supervision and monitoring of the SEC and the Anti-Money Laundering Council for anti-money laundering/countering the financing of terrorism/counter-proliferation financing.
CASP registration
The CASP Guidelines provide that CASPs must be registered as a corporation with a minimum paid-up capital of ₱100 million in cash or property, excluding crypto-assets. They must also have a physical office which must be appropriately staffed or manned during regular business hours.
Applications for registration shall be accompanied by an initial filing fee of ₱50,000. CASPs shall then pay the SEC a supervision fee based on their gross revenue during the preceding year, for the privilege of doing business.
Upon registration, a CASP must maintain an operational report that includes the total number of active users and daily trading summaries, which shall include the number of trades, crypto-assets traded, and total settlement value, among others.
CASPs must comply with Section 5 of the CASP Rules pertaining to the public offering of crypto-assets in the Philippines before they can be authorized to trade crypto-assets.
Further, CASPs must ensure that all available information from reputable or credible sources pertaining to the product/s being traded in the system is provided to investors.
CASPs must adhere to the principles of honest, fair, and professional business conduct, ensure fair access to their platform, and establish a local data center, with specific conditions for offshore IT outsourcing.
The CASP guidelines require legal and operational segregation of customer crypto-assets from the CASP’s own assets to protect them in case of insolvency.
The SEC may refuse, withdraw, terminate, or suspend the authorization of any crypto-asset services when a CASP fails to meet the requirements of the CASP Rules and CASP Guidelines; when it has not used its authorization within 12 months from the date of its grant; or when it ceases to operate or provide crypto-assets, among others.
Penalties
Under the CASP Rules, the SEC is empowered to impose enforcement actions on CASPs, third-party service providers, or unregistered entities for noncompliance with rules and other existing laws pertinent to its jurisdiction and authority.
Any person or entity who willfully violates the CASP Rules and Guidelines, the SRC, the FCPA, or other related rules or instructions issued by the Commission may be punished by imprisonment of one to five years, or by a fine of ₱50,000 to ₱10 million.
##