SEC Registration of Crypto Service Providers: What You Need to Know
The Securities and Exchange Commission (SEC) is looking to register cryptocurrency asset service providers to enhance investor protection. According to a recent release, they plan to require applicants to be a registered stock corporation under the SEC, employing at least four people residing in the Philippines, and meeting specific capital requirements. Additionally, the proposed rules mandate that crypto asset securities cannot be sold without an approved registration statement.
The SEC defines crypto assets as digitally secured representations of value relying on distributed ledger technology. They want to ensure that providers can prevent market abuse, including practices like market manipulation and insider trading. Service providers will need to adhere to cybersecurity frameworks, undergo audits, and implement standards to protect consumers effectively.
In light of the growing adoption of crypto assets in the Philippines, the SEC aims to establish a regulatory framework aligned with international standards. This framework emphasizes fair, efficient, and transparent markets while offering protection against consumer harm and systemic risks. It’s part of efforts to keep pace with technological advancements and evolving market needs, ensuring that innovative financial products and services can flourish while protecting consumers.
The draft rules are open for public comments until January 18, 2025, giving stakeholders an opportunity to provide feedback on the proposed regulations. The SEC’s move to register crypto service providers reflects a proactive approach toward addressing the changing landscape of financial markets in line with global trends and consumer demand.
