Saturday, June 22, 2024

Public warned against unregistered or overseas-based crypto firms

The Bangko Sentral ng Pilipinas (BSP) has cautioned the public against dealing with virtual asset service providers (VASPs) that are unregistered or those that are based overseas, citing the challenges and risks they may face.

Aside from risk on price volatilities, the central bank said “VASPs that are based abroad may present additional challenge(s) on enforcing legal recourse and consumer protection and redress mechanisms for local customers, among others.”

Virtual assets (VAs) are electronic forms of assets like the virtual currencies that can be traded digitally or be used as payment.

The BSP has yet to issue its own digital currency, thus its usage here in the Philippines is not yet guaranteed by the central bank.

In a press release issued on Wednesday, Aug. 17, the BSP said “VA dealings are generally considered high risk activities which may result in huge financial losses due to price swings.”

“Further, both the government and registered VASPs do not, in any way, guarantee protection against financial losses stemming from VA price fluctuations,” it said.

Citing latest data, the BSP said “frauds and scams have consistently contributed to a large portion of VA-based crimes.”

“Thus, the public should exercise caution, conduct their own due diligence, and always be mindful of the risks prior to engaging with VA-related activities,” it added.

BSP, in Circular 1108 series of 2021, said it “recognizes virtual asset (VA) systems have the potential to revolutionize the delivery of financial services by providing faster and more economical means to transfer funds, both domestic and international, and may further support financial inclusion.”

It, however, said these benefits come with risks, thus the measures to prevent the country from being used for money laundering (ML) and terrorist financing (TF). — Joann Villanueva (PNA)

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