The Securities and Exchange Commission (SEC) released two memorandums on 30 May 2025 to proper facilitate the assets that enter the country. SEC Memorandum Circular No. 04, Series of 2025 or the SEC Rules on Crypto-Asset Service Providers (“CASP Rules”) and the SEC Memorandum Circular No. 05, Series of 2025 or the SEC Guidelines on the Operations of Crypto-Asset Service Providers (“CASP Guidelines”).
The Rules and Guidelines primarily regulate those who are offering the assets and the crypto-asset services to the public.
What is a Crypto asset?
It is 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.
For the purposes of these Rules, crypto-assets are classified as financial products defined under Section 3(c) of the FCPA, specifically investments, in relation to the scope of supervision of the Securities and Exchange Commission
What is a Crypto-Asset Exchange?
An entity that, as a business, offers or engages in the operation of a crypto-asset trading venue.
What is a Crypto-Asset Intermediary?
An entity that, as a business, offers or engages in crypto asset intermediation activities.
What is a Crypto-Asset Service Providers or “CASP”
Entities that, as a business, offers or engages in the provision of one or more crypto-asset services, including by making available a digital platform that provides those services.
These services include the following:
- 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 commission.
Those interested with being a CASP has to comply with the following guidelines:
- The applicant must be an SEC registered corporation
- CASP operation must be included as the primary purpose of the corporation in its Articles of Incorporation.
- The corporation must also have a minimum paid-up capital of at least ONE HUNDRED MILLION PESOS (P100,000,000.00) in case or property, EXCLUDING crypto-assets.
- A physical office located in the Philippines.
- Submission of the CASP Form 1
Additionally, there is a registration fee of FIFTY THOUSAND PESOS (P50,000.00), or such amount as the Commission may determine.
Furthermore, there is a Supervision Fee that is dependent on every gross revenue of TWO BILLION PESOS (P2,000,000,000.00), starting with 1/300 of 1%.
However, an exemption is available, subject to application and upon order of the SEC, if the latter deems that the exception is consistent with public interest and protection of investors.
The Rules and Guidelines also provide for Public Offering of Crypto-Assets in the Philippines, which should be strictly complied with. It’s important to take note that a disclosure document relative to a Crypto-asset to be offered in the Philippines must be filed by the offeror with the SEC and published 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.
As protection to the customers of the CASPs, the Rules and Guidelines also list the following rights that it seeks to protect:
- Right to equitable and fair treatment;
- Right to disclosure and transparency of crypto-assets and crypto-asset services;
- Right to protection of consumer assets against fraud and misuse;
- Right to data privacy; and
- Right to timely handling and redress of complaints.
For this purpose, the CASPs are required them to establish procedures to ensure that clients actually understand the risks involved with crypto-assets and that they are financially able to satisfy any obligation that may arise from such financial products. The assessment involves the knowledge and experience of customers with investing in crypto-assets and their investment objectives, among others.
The SEC also requires all CASPs to adhere to any anti-money laundering and countering terrorism financing requirements.
Crypto-assets remain a novel and rapidly evolving financial venture in the Philippines. Ensuring compliance with the SEC CASP Rules and Guidelines is essential not only for regulatory adherence but also for safeguarding investors and establishing credibility in the market.
At Abo and Penaranda Law, we specialize in guiding businesses and investors through the legal and regulatory landscape of emerging financial technologies. With the help of the firm, clients can confidently navigate the complex world of crypto-assets while ensuring full legal compliance and protection of their interests.
