ABS CBN News has reported that the Philippine SEC has already accepted proposed laws for initial coin offerings (ICOs). This official acceptance is expected to allow the legal trading of Cryptocurrencies in the country. SEC chairman Emilio Aquino has said that they have released the proposed rules on ICOs for public comment before they are implemented.
Companies Launching Icos To Begin By Registering With SEC
At the beginning of this year, the Philippine SEC (Securities and Exchanges Commission) announced that it was planning to develop a regulatory framework for the Cryptocurrency sector in the country. The financial regulator then underlined the importance of having a legislation on ICOs in particular. At the time, the Chairman said the new law would target companies selling tokens or issuing Cryptocurrencies with the aim of raising funds.
SEC has revealed some details about the new proposed rules. For instance, all businesses issuing tokens or conducting an ICO will see such virtual currencies being treated as security. Consequently, these busineesses will be subjected to the Securities Regulation Code Section 3.1. This means these companies should not only register with the commission but also provide the necessary disclosures to protect the interest of investors.
The commission has observed that some proponents of ICOs in the country have indicated in their whitepapers that the tokens they issue are not securities. Consequently, they are not under the jurisdiction of the commission. In a press release, SEC said that allowing such practices is dangerous for the investors, especially after it is established later that such ICOs are scams.
To address this issue, the commission has seen it necessary to give the responsibility of proving the tokens to its proponents and this can only be achieved by treating all tokens as securities unless otherwise stated. The commission has added that the proposed rules have been borrowed from various jurisdictions and markets.
Why The New Laws Are Important
Many people have been interested in Cryptocurrencies in recent years. The use of the virtual currencies and blockchain technology has brought enormous benefits to investors and businesses alike. Whereas it has made it easy for consumers to invest in any project regardless of its geographical location, businesses have been able to raise more funds and in an easy way.
Nevertheless, given that the Cryptocurrency sector, and especially ICOs is loosely regulated, most investors fear for their investment and prefer to keep off the market. The Philippine SEC chairman believes that the proposed regulations will help in allowing retail investors to take part. On July 30 he told the Philippine Star that no company will embark on ICO and issue tokens in the country without first registering with the commission.
The New Chairman Has An Uphill Task
Mr. Emilio Aquino was appointed the chairman of the Philippine SEC in June this year. As a new chair, he has come at a time when the proliferation of the virtual currencies has got the commission and most authorities unawares. The lack of clear laws on the sector has made it challenging for most authorities to regulate it.
Notwithstanding, Aquino is not new to fight on illegal activities as he led the commission on a crackdown on investment scams. He is optimistic that proposed rules on ICOs will allow the commission to treat the virtual currencies as securities and make it even more sure for public investors.