Philippines SEC Tightens Crypto Oversight With Mandatory Licensing And Capital Rules
Crypto companies operating in the Philippines are now facing a much stricter environment as the Securities and Exchange Commission (SEC) enforces new licensing rules and disclosure standards under Memorandum Circulars Nos. 4 and 5.
The move formally regulates crypto-asset service providers (CASPs), who are now required to register and operate under clear conditions, including financial thresholds, reporting duties, and physical presence within the country.
All Crypto Firms Must Register Before Doing Business
The SEC has drawn a hard line—crypto-related businesses must secure a CASP licence before launching any activity.
Whether it’s running an exchange, promoting tokens, or offering wallets, no company is exempt.
Those who ignore the mandate risk facing up to PHP 100 million in fines or five years in prison.
Crypto offerings must now be backed by full disclosures.
These documents, which cover asset ownership, potential risks, operational models, and key individuals behind the project, must be submitted at least 30 days before any marketing or sales begin.
This applies not just to founders but also to promoters and influencers—those producing promotional content without proper registration could find themselves under investigation.
Capital And Compliance Now Key Entry Barriers
To prevent fly-by-night operators from entering the market, the SEC has introduced a minimum paid-up capital requirement of PHP 100 million.
This sum must be in fiat—not crypto—and applies across the board to all CASPs.
However, a channel remains open for smaller firms to apply under specific provisions.
The regulator also insists on a local presence.
Any firm intending to offer crypto services must maintain a physical office within the Philippines, pay an initial PHP 50,000 filing fee, and be prepared for additional annual supervision fees based on revenue.
Ongoing Monitoring And AML Controls Enforced
Once licensed, firms are expected to comply with strict reporting obligations.
This includes regular updates on trading volumes, types of assets handled, and user activity.
Under the Anti-Money Laundering Act, all CASPs are now considered “covered persons”, meaning they fall under the oversight of both the SEC and the Anti-Money Laundering Council.
Customer protection measures have also been introduced.
Companies are required to separate customer assets from corporate funds—a move aimed at preventing the kind of collapses seen in international crypto failures.
Additionally, all customer data must be stored in the Philippines.
If any IT services are outsourced offshore, specific security conditions must be met.
Enforcement Measures And Penalties For Non-Compliance
The regulations, which were issued on 30 May and came into force on 12 June, give the SEC the authority to revoke or suspend a CASP’s licence at any time.
If a company fails to operate within a year of obtaining a licence or shuts down without notice, its authorisation can be cancelled.
Violations come with severe consequences.
Beyond the PHP 100 million fine and five-year prison term, the SEC may also pursue additional sanctions under securities laws if a crypto asset is found to behave like a financial product.
Experts Say Challenges Remain As Rules Roll Out
While the regulatory framework has been welcomed by some, others believe enforcement will not be without hurdles.
Luis Buenaventura, head of crypto finance at GCash, said the industry would face substantial challenges adapting to the new system.
Nathan Marasign, a partner at MLaw Office, added,
“Regulation is rarely perfect on day one, but as long as the regulatory authority takes a progressive approach and stays open to refining the framework over time, then I think this signals the Philippines.”
SEC Targets Long-Term Market Integrity With New Leadership Push
The changes come as part of a wider effort by the SEC under Chairman and CEO Francis Lim to modernise capital markets regulation.
Lim has introduced working groups to review and simplify rules, aiming to encourage more public listings and build a more transparent financial system.
By laying out a formal structure for the crypto industry, the Philippines joins a small but growing group of nations in Asia introducing high-stakes accountability to a sector that has long operated in legal limbo.
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