Philippines’ Economic Zone Authority Issues New Rules Governing Cryptocurrencies

ICO News, News, Regulation | February 5, 2019 By:

The government of the Philippines has issued a comprehensive set of new rules governing cryptocurrencies.

In a bid to effectively regulate and protect investors, the Cagayan Economic Zone Authority (CEZA) said that it has approved the Digital Asset Token Offering (DATO) regulations, which cover the acquisition of cryptocurrencies. According to the new regulations, CEZA is the principal regulating authority of the crypto industry, while the Asia Blockchain and Crypto Association (ABACA) is designated as a self-regulatory organization (SRO) to help implement and enforce the new rules.

Under the new rules, DATOs must have proper offering documents with pertinent details on the issuer, project, and accompanying advice and certification of experts and DA Agents. Companies will be required to list the tokens on the licensed Offshore Virtual Currency Exchange (OVCE), and stakeholders must have confirmed arrangements with accredited wallet providers and custodians.

“It is our goal to provide a clear set of rules and guidelines that will foster innovation yet ensure proper compliance by actors in the ecosystem,” said Raul Lambino, CEZA administrator and chief executive officer. “It is our hope that these set of regulatory innovations will take the digital asset sector one step closer to adoption and acceptance by institutions and the traditional financial system.”

The new framework categorized the tokens based on their usage, utility tokens and security coins, and covers three levels of DATO. Tier 1 involves assets and investments not exceeding $5 million with payment made in cryptocurrencies. Tier 2 covers $6 million to $10 million in investments, while Tier 3 covers investments exceeding $10 million.

CEZA believes that the new framework will provide much needed change to the industry and encourage innovators to use new technologies responsibly.

“The safeguards built into CEZA’s rules and system will lead to greater investor protection and transparency,” Lambino said. “The involvement of DA agents and experts bring in competent and neutral third parties into the process to help ensure issuers are truthful and accurate.”

ABACA will be helping the government regulate crypto companies by enforcing a code of conduct among its members. It will also report any breach, violations, or any matters relating to OVCE rules and regulations.

“The SRO model allows industry players to police its own ranks, while also promoting and protecting the interests of cryptocurrency investors,” said Ma. Juanita Cueto, Chairperson of ABACA. “The rules will remain stringent in assessing the ethics and integrity of companies eyeing to launch Digital Asset Token Offerings.”