Philippines’ Economic Zone Approves Three Crypto Exchanges

News | July 11, 2018 By:

The Philippines’ Cagayan Economic Zone Authority (CEZA) has approved the application of three cryptocurrency exchanges to legally operate in the economic zone.

CEZA is a state-owned corporation that controls the Cagayan Special Economic Zone and Freeport operations. The economic zone is a major trans-shipment point for trade in the Asia-Pacific rim due to its strategic location between the Pacific Ocean and the West Philippine Sea.

Last month, Raul Lambino, Administrator and CEO of CEZA, revealed that they will issue 25 principal licenses for crypto companies, and each firm will only have sub-licenses of as many as 20 to 30 traders or brokers. Crypto firms are required to invest at least $1 million within two years and they must have a back office in the Philippines. Ceza also requires crypto firms to pay $100,000 for application fee, $150,000 for the license to operate and $100,000 for the agency’s probity check. Should the applicant fail the probity check, the $100,000 will not be refunded.

On Tuesday, CEZA annouced that three crypto firms have been given green light to operate in economic zone.

Ceza Senior Deputy Administrator Raymundo T. Roquero said two of the exchanges were from Hong Kong and the third from Thailand. Roquero identified Hong Kong-based Golden Millennial Quickplay (GMQ) as the first recipient. The applications of the other two crypto firms have been approved, but Roquero said their licenses are yet to be released.

“These are offshore companies, and they have committed investments of $1 million (P534.6M USD) [each],” Roquero said. “GMQ intends to build [its] infrastructure in Sta. Ana, Cagayan…and will have an incubation period of two years, so they are already allowed to operate here in Manila.”

The Ceza Senior Deputy Administrator also said that they are expecting to generate P3.6 billion ($67M USD) of investments for the initial 25 licenses it will issue to crypto firms. He added that each firm will require around 500 workers.

“There are more than 70 applicants, but so far, only three licenses have been granted,” Roquero said. “Six other applicants have fully paid their obligations, but they are still undergoing probity checks.”

During the formal awarding of the license in Pasay City, Lambino said CEZA is using advanced security measures to ensure crypto firms operating in the economic zone will not suffer from fraud transactions and data breaches.

“Our goal is to push the logical progression of these technologies into the mainstream, so that transactions that are mediated by them will be fail-safe, will be secure and will be easier and faster,” Lambino said. “Technology’s benefits are awesome, but they coexist with risks, such as the threat of fraud and possible data breaches.”