Securities and Exchange Commission Issues Regulations for Crypto-Asset Service Providers
Fernand Joseph D. Miranda | Ralph Gabrielle D. del Rosario | Graziela Ayn Louise V. Delfin | Jessa Angelica A. Lat
In response to the widespread adoption of crypto-assets in the Philippines, the Securities and Exchange Commission (“SEC”) issued on 30 May 2025 two Memorandum Circulars regulating Crypto-Asset Service Providers (“CASPs”) and their operations.
The prevalence of crypto-asset adoption in the Philippines is evident as it ranked 8th out of 151 countries in the 2024 Global Crypto Adoption Index, with its eleven million (11,000,000) crypto users and estimated Forty Billion US Dollars (US$40,000,000,000) worth of cryptocurrency value in transactions. The growth and development of the crypto industry is expected to continue as Bitcoin, the largest cryptocurrency by market capitalization, has been hitting an all-time highs, with other cryptocurrencies, such as Ethereum and Dogecoin, following suit.
In March 2017, or when Bitcoin price was hovering at a price of USD1,000, the Bangko Sentral ng Pilipinas (“BSP”) released BSP Circular No. 944-17 which established guidelines for Virtual Currency (“VC”) exchanges in the Philippines offering services or engaging in activities that provide facility for the conversion or exchange of fiat or government-issued currency to VC or vice versa. The BSP required the VC exchange to obtain a Certificate of Registration to operate as a remittance and transfer company. These guidelines were then amended in 2021 by BSP Circular No. 1108, which expanded the regulations on VC exchanges to Virtual Asset Service Providers (“VASPs”). BSP Circular No. 1108 prescribed the application for a Certificate of Authority for both BSP-registered VC exchanges and VASPs. Further, it set the minimum paid-in capital for VASPs.
Starting 01 September 2022, however, the BSP issued a moratorium on the issuance of VASP licenses with the issuance of BSP Memorandum No. M-2022-035. The moratorium, set for a three-year period, is expected to expire on 01 September 2025. Several months ahead of the lifting of the moratorium, however, the SEC, as the primary regulatory body of corporations and securities in the Philippines, issued a twin set of rules and guidelines on the operations of CASPs. The first, SEC Memorandum Circular (“MC”) No. 4-2025, establishes the general rules applicable to CASPs, including the definition of CASPs, the rights of a Crypto-Asset Financial Consumer, and the requirement of disclosure of information on the crypto-assets being offered. On the other hand, SEC MC No. 5-2025 details guidelines on the requirements for operating a CASP in the Philippines.
SEC MC No. 4-2025: Rules on Crypto-Asset Service Providers
The Rules on Crypto-Asset Service Providers (“CASP Rules”) formally defined “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. The CASP Rules also described a “CASP” as an entity that, as a business, offers or engages in the provision of one or more crypto-asset services, which includes making available a digital platform that provides those services.
In turn, crypto-asset services include any of the following activities in relation to crypto-assets:
- Offering crypto-assets to the public;
- Operating a crypto-asset trading venue;
- Crypto-asset intermediation activities; or
- Other services related to crypto-assets that may be determined by the SEC.
The above definitions are essential with respect to the use or transacting of cryptocurrencies in the Philippines since the CASP Rules now require the CASP entities to secure a license with the SEC.
Similar to the rules provided by the Securities Regulation Code of the Philippines, an offeror of a crypto-asset in the Philippines, is now required to file a disclosure document with the SEC and publish on the platform’s website, social media account, and other means of communication not less than thirty (30) days before any marketing activities or the actual offering, whichever comes first.
The disclosure seeks to inform the investing public about the nature of the crypto-asset, including but not limited to information about the offeror or issuer, key features, risks and prospects of crypto-assets, and the rights and obligations attached to said crypto-assets (if any).
The CASP Rules further provide that a person or entity must be registered as a corporation under Philippine laws and obtain the necessary licenses from the concerned regulatory agencies (e.g. SEC and BSP) to engage in the marketing of crypto-assets and crypto-asset services. The requirement to register, however, does not extend to third-party service providers for the marketing or inducement of crypto-assets or crypto-asset services. The CASP Rules also emphasize that all forms of marketing of crypto-assets or crypto-asset services must be in plain, clear, and concise language that accurately and sufficiently discloses the product or service provided, as well as the associated risks in a manner that is not misleading in both substance and presentation.
Given the inherent fiduciary nature of crypto-assets and crypto-asset services, CASPs are considered as covered persons under the Anti-Money Laundering Act of 2001, as amended (“AMLA”) and are therefore subject to Anti-Money Laundering, Countering the Financing of Terrorism, and Counter-Proliferation Financing supervision and monitoring of the SEC and the Anti-Money Laundering Council (“AMLC”).
SEC MC No. 5-2025: The SEC Guidelines on the Operations of Crypto-Asset Service Providers
The second issuance by the SEC refers to Guidelines on the Operations of Crypto-Asset Service Providers (“CASP Guidelines”). The guidelines apply to both CASPs and third-party service providers who engage in the marketing of crypto-assets and crypto-asset services.
The CASP Guidelines detail the requirements for CASP Registration. In addition to documentary requirements, an applicant for a CASP registration must be a corporation registered with the SEC, and it must have a physical office that is appropriately staffed or manned during regular business hours.
The CASP Guidelines furthermore outline the rules for trading crypto-assets. CASPs are required to maintain and implement clear and objective listing and delisting standards regarding crypto-assets, and apply those when considering admission to trading, suspension, or delisting of crypto-assets. Notably, the SEC reserved its power to order the removal or suspension of a crypto-asset in a CASP, in the interest of investor protection.
Operational requirements for CASPs include a requirement to act honestly, fairly, and professionally in accordance with the best interests of their clients and prospective clients. In this regard, CASPs are required to ensure fair access to persons wishing to use their platform, and to ensure the capacity, integrity, and security of their automated systems. In addition to security of their platforms, CASPs are likewise required to have proper customer service, to address the issues or complaints of their users. CASPs are also required to perform market monitoring to prevent market abuse, insider dealing, unlawful disclosure of inside information and other financial crimes.
Considering the foregoing, it is apparent that the issuances of the SEC regarding CASP registration and operations are centered on the protection of the investing public. However, despite the laudable efforts of the SEC, and in view of the continuous innovation of financial technology and cryptocurrency participants, it remains to be seen how the SEC may ultimately balance the rights and obligations of the investing public, vis-à-vis the free market digital economy.