SEC Warns Public Against Unregistered and Unlicensed Cryptocurrency Exchanges in Philippines
Subscribe to our newsletter!
- The SEC is warning against using unregistered cryptocurrency exchanges.
- Philippine law requires business entities to register with the SEC, and it is illegal to sell securities in the country without the necessary licenses to do so.
The Securities and Exchange Commission (SEC) is warning the public against using unregistered and unlicensed cryptocurrency exchanges operating in the country. This follows the recent collapse of a large international exchange, which left many unsecured creditors with little chance of recovering their money.
The SEC is referencing FTX, which was the world’s third largest crypto exchange before its collapse last November. FTX was found to be mingling its funds with Alameda, a hedge fund firm owned by the FTX CEO Sam Bankman-Fried. The exchange has since filed for bankruptcy and Bankman-Fried was charged the US SEC with securities fraud, among others.
As per the SEC, according to Philippine law, any entity conducting business in the country must register with the Commission. Responsible for supervising more than 600,000 active corporations, it also develops and regulates the capital markets.
Under Philippine securities laws, it is illegal to sell or offer securities for sale or distribution in the Philippines without a registration statement that has been filed with and approved by the SEC. Additionally, it is illegal to engage in the business of buying or selling securities in the Philippines without being registered as a broker or dealer with the SEC.
- Read More: SEC Advisories
In addition, only corporations registered in the Philippines are allowed to grant loans from their own capital funds or from funds sourced from a maximum of 19 people. Lending companies must also be granted an authority to operate by the SEC before conducting business.
The SEC has since issued an “Advisory against Dealing with Non-Registered Foreign Entities, Organizations and Corporations,” warning the public about unregistered cryptocurrency exchanges that are targeting Filipino investors and borrowers through online advertisements and allowing them to access their platforms and create client accounts. These exchanges often offer high-risk and potentially fraudulent products and schemes, the SEC said.
Some examples of the facilities or platforms offered by unregistered cryptocurrency exchanges include the sale of unregistered cryptocurrencies, the conversion of one cryptocurrency to another, the facilitation of unregistered coin or token offerings, cryptocurrency savings with promised returns, crypto-loans, cryptocurrency derivatives and futures contracts, tokenized shares of stocks, and educational platforms.
To ensure that it is safe to transact with an online platform or entity, the SEC advises the public to check its website (www.sec.gov.ph) for information on company registration, registration statements, secondary licenses, advisories, investor protection, and other relevant information.
This article is published on BitPinas: SEC Warns Public Against Unregistered Cryptocurrency Exchanges in Philippines
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.