The Philippines securities and exchange commission (SEC) has published a set of draft rules for regulating initial coin offerings (ICOs) for public review, according to an official statement.
In an SEC Memorandum Circular, the agency stipulates that any company registered in the Philippines looking to run an ICO, or any ICO selling tokens to Filipinos, must submit an ‘initial assessment request’ to the Commission to determine whether or not their token is a security. The regulator specifies ICO issuers should submit their initial assessment request no less than 90 days prior to the ‘start of the pre-sale period.’ The request within will be reviewed by the SEC in 20 days, extendable up to 40 days, and provide a written report on whether or not a given ICO token is considered a security. The SEC has suggested ICOs may be exempted from registration with the agency in the case of plans to distribute tokens of less than 20 individuals or a limited number of institutional investors. The SEC invites ‘banks, investment houses, the investing public and other interested parties’ to submit feedback on the proposed rules no later than August 31. According to the memorandum, the proposed regulatory framework for ICOs intends to combat fraudulent ICO projects and protect investors from scams.
Asian ‘silicon valley’
The Philippines SEC has repeatedly suggested regulating crypto assets under the country’s securities laws since first proposing to do in late 2017. The SEC has previously suggested considering cloud mining contracts as securities, since investors in the mining capacity of remote data centers are running the process via ‘investment contracts’ which can be traded on. The Philippines government has taken a positive stance on the crypto space recently, having established a blockchain and fintech hub in the Cagayan Economic Zone Authority (CEZA), and has ambitions to create an Asian ‘silicon valley.’ Ten blockchain and crypto firms are currently authorized to operate in the zone, with provisional licenses granted to three cryptocurrency exchanges in the zone, expecting to attract $3 million in investments following issuance.