According to a press release published by the Asia Blockchain and Crypto association (ABACA) on February 4, the Philippines has introduced new rules that will govern Digital Asset Token Offering (DATO).
The new set of regulations unveiled by the country’s Cagayan Economic Zone Authority (CEZA), are reportedly designed to regulate the country’s crypto industry in a bid to protect investors. These new regulations will affect issues such as utility and security tokens, as well as the acquisition of crypto assets.
These new developments mean that the Cagayan Economic Zone Authority (CEZA) will become the main regulator of crypto in the country while the ABACA has been designated as a self-regulatory organization (SRO) to enforce the new framework.
As per the press release, all DATOs will be required to have proper offering documents with full details on the offering issuer and project as well as accompanying advice and certification of the experts. Tokens on offer must also be listed on the licensed offshore Virtual Currency Exchange (OVCE)
The press release further revealed that the new regulations will be divided into tiers. Tier one will involve investments and assets not exceeding $5 million in digital tokens. Tier two will involve investments and assets ranging from $6 to $10 million made in digital tokens, while tier three will involve investments and assets exceeding $10 million.
Raul Lambino who is the CEZA Executive officer made the following remarks on the newly introduced framework;
“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. 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.”
Though the new regulations do not really touch on initial coin offerings (ICOs), the country’s major financial watch dog, the Philippines Securities and Exchange Commission (PSEC) has been addressing them for a while.
The PSEC initially issued a set of draft rules designed to regulate ICO’s in August last year. The commission then directed any philippino company looking to run an ICO to submit an “initial assessment request” to the commission, inorder to determine whether or not their coin was a security.
September last year, saw the PSEC announce that it was close to unveiling a draft regulation for crypto-currencies by the middle of the month. In the beginning of 2019 however, the PSEC claimed that it was not ready to issue final regulation on ICO’s. The commission explained the delay of the release to multiple requests by different stakeholders for more time to examine the draft rules.