In a move aimed at strengthening the regulation of digital financial innovations while ensuring investor protection and market integrity, the Securities and Exchange Commission (SEC) has issued two key regulatory frameworks governing the conduct of crypto-asset activities in the Philippines.
The commission officially released SEC Memorandum Circular Nos. 4 and 5, Series of 2025, which establish the SEC Rules on Crypto-Asset Service Providers (CASP Rules) and the SEC Guidelines on the Operations of Crypto-Asset Service Providers (CASP Guidelines).
The regulations aim to oversee the marketing, issuance, and trading of crypto-assets, and the registration and operation of entities offering crypto-related services.
“As we encourage innovation in the financial sector, it is equally imperative to implement safeguards that protect the public and maintain trust in our markets,” said SEC chairperson Francis Lim.
“These new rules strike a balance between fostering technology-driven financial ventures and enforcing prudent oversight.”
Under the CASP Rules, crypto-assets are defined as cryptographically secured digital representations of value or rights, transacted and validated using distributed ledger or similar technology.
Crypto-asset securities, meanwhile, are classified as securities under the Securities Regulation Code (SRC).
A crypto-asset service provider (CASP) is any business entity that offers or engages in crypto-asset services, including running digital platforms that facilitate the trading, transfer, or storage of such assets.
The rules apply not only to CASPs but also to third-party service providers involved in marketing crypto-assets and related services.
Crypto-assets that qualify as financial products or securities must be registered with the SEC before they are marketed or offered for sale. A disclosure document or registration statement must be filed and approved by the SEC.
Entities marketing crypto-assets or offering crypto-asset services must be registered corporations with appropriate licenses from regulatory agencies such as the SEC and the Bangko Sentral ng Pilipinas. Educational materials produced in good faith and not intended for marketing are exempted from this requirement.
Offerors are required to publish disclosure documents at least 30 days prior to any public offering. These documents must contain key information, including details about the issuer, features, and risks of the asset, and the underlying technology.
The rules also apply to Initial Coin Offerings (ICOs) when these are deemed to involve the sale of securities.
Registered CASPs are considered covered persons under the Anti-Money Laundering Act, subject to supervision by the SEC and the Anti-Money Laundering Council (AMLC) for compliance with AML/CFT regulations.
According to the CASP Guidelines, all CASPs must:
- Be registered corporations with a minimum paid-up capital of P100 million (excluding crypto-assets);
- Maintain a physical office with appropriate staffing;
- Pay an initial filing fee of P50,000 and an annual supervision fee based on gross revenue;
- Submit operational reports detailing user activity and trading summaries.
- Adhere to public offering requirements before trading crypto-assets.
- Provide investors with credible and accessible information about tradable products;
- Operate with honesty, fairness, and professionalism, ensuring local data storage and segregation of customer assets from the CASP’s assets to protect in cases of insolvency.
The SEC is empowered to refuse, suspend, or revoke authorizations of CASPs that fail to comply with the rules, do not operate within 12 months of authorization, or cease crypto-asset activities.
Entities found to be willfully violating the CASP Rules, Guidelines, or other relevant laws face penalties ranging from one to five years imprisonment and fines between P50,000 to P10 million.
With this development, local think tank Infrawatch has called on the SEC to close enforcement gaps that unregistered cryptocurrency platforms may exploit against the public.
Infrawatch made the call after the SEC launched the Strategic Surveillance and Enforcement Sandbox (StratBox), a regulatory tool for cryptocurrency platforms.
While it called Stratbox as a significant “progress in cryptocurrency regulation,” the think tank said the initiative “must be paired with firmer efforts to close enforcement gaps that enable unregistered platforms to facilitate fraud and abuse.”
Infrawatch convenor Terry Ridon said the StratBox, which allows licensed CASPs to test new products and services under regulatory supervision, is a timely move to promote innovation in the country’s digital asset ecosystem.
“The sandbox model supports innovation but only for regulated and licensed entities. The use of crypto for illicit activities remains rampant particularly on unregulated and unlicensed firms, and the government should crackdown on firms operating in the Philippine market,” he said.
The StratBox, which opened applications in May, is designed to give registered crypto firms a controlled environment to develop and deploy digital financial products while allowing regulators to assess associated risks.
“If the SEC seeks strict compliance from licensed cryptocurrency exchanges, it should undertake stronger measures to crackdown on unlicensed exchanges operating in the Philippines, particularly through advisories warning the public against investing in these firms,” Ridon said.
Unlicensed platforms, he said, are often used to facilitate online scams, money laundering, and other illicit activities — many of which have already victimized Filipino users.
Ridon urged the SEC to work more closely with the National Telecommunications Commission (NTC) to implement access restrictions on illegal platforms — similar to the agency’s earlier move to block Binance from operating in the country without proper registration.
“Compliant players are subject to strict regulatory requirements, while unlicensed entities often operate with fewer restrictions, creating a distorted environment where non-compliance appears more profitable,” Ridon said. “This sends the wrong signal to the market and undermines confidence in the regulatory framework.”
Ridon added that any push to develop the digital asset sector must be grounded in a strong system of transparency, accountability, and law enforcement.
“An emerging crypto environment should be regulated by the government to protect the public interest and investor funds while allowing innovation to thrive. This means crypto entities working with the government through a regulatory framework which gives importance to transparency and accountability while allowing entities to create new products and services to fill various gaps in the market,” Ridon said.
Local think tank Infrawatch has called on the Securities and Exchange Commission (SEC) to close enforcement gaps that unregistered cryptocurrency platforms may exploit against the public.
Infrawatch made the call after the SEC launched the Strategic Surveillance and Enforcement Sandbox (StratBox), a regulatory tool for cryptocurrency platforms.
While it called Stratbox as a significant “progress in cryptocurrency regulation,” the think tank said the initiative “must be paired with firmer efforts to close enforcement gaps that enable unregistered platforms to facilitate fraud and abuse.”
Infrawatch convenor Terry Ridon said the StratBox, which allows licensed Crypto Asset Service Providers (CASPs) to test new products and services under regulatory supervision, is a timely move to promote innovation in the country’s digital asset ecosystem.
“The sandbox model supports innovation but only for regulated and licensed entities. The use of crypto for illicit activities remains rampant particularly on unregulated and unlicensed firms, and the government should crackdown on firms operating in the Philippine market,” he said.
The StratBox, which opened applications in May, is designed to give registered crypto firms a controlled environment to develop and deploy digital financial products while allowing regulators to assess associated risks.
“If the SEC seeks strict compliance from licensed cryptocurrency exchanges, it should undertake stronger measures to crackdown on unlicensed exchanges operating in the Philippines, particularly through advisories warning the public against investing in these firms,” Ridon said.
Unlicensed platforms, he said, are often used to facilitate online scams, money laundering, and other illicit activities — many of which have already victimized Filipino users.
Ridon urged the SEC to work more closely with the National Telecommunications Commission (NTC) to implement access restrictions on illegal platforms — similar to the agency’s earlier move to block Binance from operating in the country without proper registration.
“Compliant players are subject to strict regulatory requirements, while unlicensed entities often operate with fewer restrictions, creating a distorted environment where non-compliance appears more profitable,” Ridon said. “This sends the wrong signal to the market and undermines confidence in the regulatory framework.”
Ridon added that any push to develop the digital asset sector must be grounded in a strong system of transparency, accountability, and law enforcement.
“An emerging crypto environment should be regulated by the government to protect the public interest and investor funds while allowing innovation to thrive. This means crypto entities working with the government through a regulatory framework which gives importance to transparency and accountability while allowing entities to create new products and services to fill various gaps in the market,” Ridon said.
