Two-Tier Regulatory Model for Cryptocurrency in the Philippines
Unique Dual Legal Framework
The Philippines has established a comprehensive legal framework regarding the Requirements and Considerations for the Cryptocurrency Token List, setting up a dual regulatory model to control token operations, issue licenses, and protect investors. Clear rules on token classification, VASP licensing, and legal compliance obligations promote transparency and safety in the industry. This legal framework is a significant step forward, helping investors understand the complex standards related to the cryptocurrency network.
Role of Specialized Regulatory Agencies
In this model, the Central Bank of the Philippines (BSP) and the Securities and Exchange Commission (SEC) hold central positions. BSP oversees Virtual Asset Service Providers (VASP) such as exchanges, transfer services, and custodial services. Meanwhile, the SEC regulates token classifications as securities, ensuring valid registration or exemption for token offerings.
Legal Issues Affecting the Cryptocurrency Token List
Key Regulations Guiding the Industry
Tax and legal regulations contribute to the framework for issuing and operating tokens. The Bureau of Internal Revenue (BIR) treats crypto as property, applying a 6% capital gains tax, income tax, and business tax. Additionally, the Data Privacy Act (RA 10173) requires issuers and exchanges to protect personal information, while the Cybercrime Prevention Act (RA 10175) addresses cybercriminal behavior, hacking, and fraud in the cryptocurrency industry.
VASP Licensing and Responsibilities of VASP Entities
Strict Licensing Requirements and Obligations
Virtual Asset Service Providers in the Philippines must ensure BSP approval, comply with capital standards, governance structure, cybersecurity, and user protection. Mandatory activities such as risk assessments, identity verification (KYC), anti-money laundering (AML), and thorough token classification are all mandatory requirements. Furthermore, exchanges must implement appropriate transaction monitoring according to the FATF's Travel Rule to prevent money laundering for transfers over $1,000.
Severe Penalties for Regulatory Violations
Strict Sanctions of the Regulatory Framework
Non-compliance with regulations can lead to severe penalties for violators. The SEC can impose fines of up to ₱5 million, plus ₱2,000 per day for continued violations, alongside imprisonment of 7 to 21 years. Violations by the BSP are treated with warnings or license revocation, along with a penalty of three times the value of the transaction. Additionally, violations related to money laundering and data protection can incur administrative fines of up to ₱5 million or imprisonment of up to 14 years.
Conclusion: The Philippines Becomes a Professional Cryptocurrency Hub
Vision for Development and High Security
The legal framework of the Philippines is clear, outlining clear steps for token classification, VASP licensing, cross-border transaction management, and exchange compliance. This policy not only protects investors but also helps the cryptocurrency industry in the country develop transparently and safely. With stringent legal corridors, the Philippines is shaping as a dynamic and innovative regulatory hub for the cryptocurrency sector in Southeast Asia.
Source: https://tintucbitcoin.com/philippines-that-chat-quy-dinh-token-moi/
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