The Philippines has introduced a comprehensive framework for the Regulatory Requirements and Considerations for Listing Cryptocurrency Tokens, establishing a twin-regulator model to govern token activities, licensing, and investor protections. The framework sets clear rules for token classification, VASP licensing, and key compliance obligations.
Twin Regulatory Model for Crypto Tokens
The new framework adopts a dual regulatory approach, with both the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC) playing crucial roles:
- BSP (Bangko Sentral ng Pilipinas)
Oversees Virtual Asset Service Providers (VASPs), ensuring that activities such as exchange, transfer, and custody comply with consumer protection and AML/CFT standards. - SEC (Securities and Exchange Commission)
Regulates tokens classified as securities under the Securities Regulation Code (SRC). It ensures proper registration or exemption of token offerings and listings.
Key Laws Impacting Crypto Token Listings
The regulatory framework incorporates several legal provisions affecting token issuance and operations:
- BIR Revenue Memorandum Circulars 94-2014 & 85-2018
Treats crypto assets as property, applying capital gains (6%), income, and business taxes. - RA 10173 – Data Privacy Act
Applies to crypto exchanges and token issuers collecting personal data. - RA 10175 – Cybercrime Prevention Act
Targets cybercrime, fraud, and other illegal activities in the crypto space with strict penalties.
VASP Licensing and Obligations
VASPs operating in the Philippines must secure BSP approval and comply with strict requirements:
- Licensing Conditions
Includes capital requirements, governance structure, cybersecurity standards, and consumer protection measures. - Operational Obligations
Mandatory risk scoring, KYC, AML compliance, and token classification analysis. - Transaction Monitoring
Exchanges must implement Travel Rule-compliant transmissions (as per FATF Recommendation 15) for crypto transfers over US$1,000.
Penalties for Non-Compliance
The framework imposes heavy penalties for failing to meet regulatory standards:
- SEC Non-Compliance
- Fines up to ₱5 million
- Additional ₱2,000 per day for continuing violations
- 7–21 years imprisonment for wilful false statements
- Fines up to ₱5 million
- BSP Circular 118 Violations
- License suspension or revocation
- Fines up to three times the transaction value
- AML Violations
- ₱5 million administrative fine
- Up to 14 years imprisonment
- Data Privacy Violations
- Fines between ₱500,000 to ₱5 million per act
- 1–6 years imprisonment for misuse of sensitive data
- Fines between ₱500,000 to ₱5 million per act
Final Thoughts
The Philippines’ new crypto token listing framework sets a clear regulatory pathway for token classification, VASP licensing, cross-border trading, and exchange compliance. It emphasizes investor protection, tax clarity, and enforcement of cybersecurity and data privacy, positioning the country as a proactive crypto-regulatory hub in Southeast Asia.
