Philippine SEC proposes stiff $1.8 million capital for crypto firms

The Philippine Securities and Exchange Commission (SEC) has released a draft set of guidelines designed to regulate Crypto-Assets Service Providers (CASPs) operating within the country.  

The Commission said the public can submit comments on the proposed “SEC Guidelines on the Operations of Crypto-Assets Service Providers (CASP Guidelines)” until 26 April. These rules represent a pivotal move by Philippine authorities to tighten oversight of digital asset transactions amid rising interest and participation in the crypto sector.  

A central provision of the draft guidelines is the imposition of a significant financial threshold of a minimum paid-up capital of PHP100 million ($1.8 million) for any entity wishing to register as a CASP. According to the SEC, this requirement applies to all businesses operating in the Philippines that offer crypto-assets as part of their commercial activity. Furthermore, entities must already be registered corporations with the SEC, with a declared primary purpose that explicitly includes crypto-asset services. This financial requirement is intended to ensure that only well-capitalised and stable companies enter the sector, thereby protecting consumers and enhancing overall market integrity.  

Extensive documentary requirements for applicant

In addition to meeting the capital requirement, prospective CASPs must submit CASP Form 1 along with a comprehensive suite of certified documentation. These include details on listing and delisting standards for crypto-assets, trading and disclosure protocols, business conduct rules, and technical descriptions of both software and hardware infrastructure. Applicants must also provide risk disclosure matrices, corporate governance policies, a detailed business plan, and proof of financial capacity. The SEC underlines that firms must be “sufficiently capitalised and must have sufficient financial resources to ensure that the business is resilient,” signalling a focus on long-term viability and risk preparedness.  

Potential exemption pathway based on public interest  

The draft regulations also allow for the possibility of exemptions. Under Section 3, the SEC may issue an exemption order for certain applicants, provided it determines that such an exemption aligns with public interest and ensures the protection of investors. This clause suggests flexibility in the otherwise stringent registration process, enabling the Commission to exercise discretion in special cases. However, such exemptions must be applied formally, and approval will be granted on a case-by-case basis.  

The SEC also clarified that the CASP Guidelines do not override or amend the existing regulations enforced by other Philippine regulatory agencies, such as the Bangko Sentral ng Pilipinas (BSP), the country’s central bank, which also exercises oversight over crypto-related activities.