The Philippines Security and Exchange Commission has recently announced the draft of rules for how businesses can fundraise the ICO. In this system, by default, all tokens are considered securities.
It is likely that the technological world understood that cryptocurrency is the next step of technological revolution. They are no longer denying it and countries will not be applying limitations to it further. They are currently working on the legislation base and implementation of cryptocurrency into the real world.
Philippines Regulation Gaining Traction
The regulatory is now becoming extremely popular in numerous countries. They either develop LEGO framework to control ICO or devise guidelines on how to avoid breaking the financial rules.
Neighboring country, Thailand, has recently run the legal registration of ICO projects for fundraising. Having set the new regulatory rules, Philippines will soon become the new Asian giant.
At the beginning of August, the Philippine Security and Exchange Commission introduced the local ICO rules. It is a 37-page document which states that all tokens distributed during the initial coin offering will be considered securities. Only the issuer will be able to change it to prove if it is incorrect.
Rapidly, the document began to gather public complaints. However, the SEC promises that the new verification process will make the scamming process much more complicated. It is said to protect amateur investors from any illegal actions.
The Philippines financial watchdog in the official memorandum stated:
“Allowing various ICOs conducted in the Philippines to claim that their tokens are not securities has proven dangerous to the investing public who are left with no clear recourse once the said ICOs are proven to be scams. Therefore, the SEC will put the burden of proving that the tokens issued through an ICO in the hands of the proponents by presuming that the tokens are securities unless proven otherwise.”
According to the memorandum, anyone wanting to start the initial coin offering must file the application to the SEC. It has to include all the detailed documents as they will have to prove the tokens functionality and operations for credibility. Usually, the ICO can only register the security tokens with SEC, however, the agency will be able to decide if other types of tokens can also be used as security tokens.
Furthermore, all the ICO team members and advisors also have to provide a proof of their respectable reputation. They can submit their documents to NBI and the police clearance department. Another piece of information they have to provide includes a detailed white paper which will include the system’s architecture and app fees. Moreover, the independent attorney must verify that the tokens are not securities.
SEC will then write a report to affirm whether the new cryptocurrency has to be registered. If any company in the Philippines is going to conduct a token sale, it must submit the application not later than 90 days in advance. At the same time, SEC noted that they can consider the token as securities. In that case, the companies will be able to hold on the project and wait for a regulatory approval.
These new rules and the speculations about the position of SEC on ICO lasted for several months in the Philippines. In the document preamble, the SEC says that ICO “will help raise capital and resources for small and local businesses”. Also, it “will provide alternative investment opportunities for the investing public.”
Continue Reading: Philippines, Korea, and Thailand Move to Create the Next Crypto Valley