By Shiela Bertillo
The Securities and Exchange Commission (SEC) pointed out that the investing public must be cautious in dealing with digital and cryptocurrency investments. The Commission mentioned this during the webinar organized by the Philippine Stock Exchange yesterday, January 30.
Vicente Graciano P. Felizmenio, Jr., SEC’s director of the Markets and Securities Regulation Department, noted that investment scams specialized in the assets are rampant in the Philippines.
“(SEC) is not against DLT (distributed ledger technology), it’s not against blockchain, and definitely we even encourage the use of it in the market, and we favor innovation,” Felizmenio stated.
However, the director emphasized that there are entities that are taking advantage of the increasing popularity of cryptocurrency. Felizmenio also mentioned the SEC are issuing advisories against scams by unlicensed parties that entices people to invest funds in digital assets.
This month alone, the SEC already flagged 4 entities that are leveraging the emerging market of cryptocurrency and play-to-earn games.
The public were warned against transacting with individual or group of persons soliciting investments for and on behalf of crypto trading entities Crypto Asset, CryptoStakers, CryptoPayz and Outrace Play-to-earn. The SEC stressed that these entities do not have a corresponding Certificate of Authority as a Money Service Business and are also not registered as a Virtual Asset Service Provider (VASP) with the Bangko Sentral ng Pilipinas (BSP).
As per the Circular No. 1108 or the Guidelines for Virtual Asset Providers, those entities that engage with virtual assets are required to secure a license from the BSP.
In the Philippines, cryptocurrencies are classified as digital or virtual assets.
Melchor T. Plabasan, BSP Technology Risk and Innovation Supervision Department Director, stated that the central banks are “veering away from calling these cryptocurrencies currency or money.”
“There’s really a technical and legal definition for currency or money,” Plabasan said. According to him a currency “should be backed by the central bank or by a monetary authority; it should be stable.”
“We really conduct thorough evaluation, on-site and off-site supervision; we do… technical review before these products and services are offered to the public and when you secure your license as a virtual asset service provider, then you are now required to comply with the BSP’s regulations,” Plabasan said as he discussed the current regulations on virtual asset service providers.
Accordingly, the BSP and SEC also mentioned this during BSP’s Cryptocurrency 101 virtual conference last year. The financial regulator stated that they do not encourage people to invest in cryptocurrency and the public must do their own due diligence before engaging. (Read more: BSP, SEC Do Not Encourage the Public to Invest in Crypto)
This article is published on BitPinas: SEC Advises Public to be Cautious on Crypto Investments