Philippines crypto regulator fends off corruption accusations

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Secretary Raul L. Lambino, CEO of the Cagayan Economic Zone Authority (CEZA), has the important role of overseeing dozens of cryptocurrency companies trying to grow in the Philippines. With that industry needing a trusted regulator, new accusations that Lambino is tremendously corrupt have him passionately defending CEZAs processes.

The accusations come from Ramon Tulfo, columnist and former envoy to China of President Rodrigo Duterte. He claims that he’s learned of Lambino’s alleged corruption during his time in China, where Chinese cryptocurrency companies would complain of being robbed by the regulator, as well as from documents provided to him by the National Intelligence Coordinating Agency (NICA).

Tulfo alleges that Lambino is charging a premium for offshore virtual currency exchange licenses (OVCE). “Lambino reportedly charges each applicant for crypto currency investments within CEZA $100,000 for principal license and another $100,000 for application fee; however, only $3,000 is recorded in the receipt, intelligence reports say,” Tulfo wrote in a February 20 column for the Manila Times.

On top of that, he also reports that these OVCE licensees were compelled to turn over 10 percent of capital stock to CEZA officials before they were allowed to start business, as well as a monthly stipend, amounting to P5 million weekly ($98,000).

The effect of this has been to make Lambino tremendously wealthy, of course. Tulfo describes the regulator as being middle-class just a few years ago, losing elections in Pangasinan to men from more prominent families. But that luck changed for the Lambino family when he got his current role:

“In the 2019 midterm election, Lambino’s wife Marilyn won as mayor of Mangaldan town while his son Mark was elected provincial vice governor.

“Funds for the political campaign came from Chinese investors who have business interests, mostly gaming and crypto currency, within CEZA, according to intelligence reports.”

In his own three-part series of columns, Labmino has responded to all of Tulfo’s allegations. Regarding OVCE licensees, he breaks down how CEZAs fees work:

“The CEZA fees for joining the program are two-fold. Each OVCE principal license consists of $100,000 for the application fee and $150,000 for the license fee for a total of $250,000. The schedule of fees for the FTSOVCE Business Rules are published in the CEZA website and can be accessed by the public.

“All payments for the application and license fees are officially receipted.”

CoinGeek has checked CEZA’s website, and the fee schedule matches the figures Lambino describes.

Responding to the alleged 10 percent of capital he and his fellow regulators take from each crypto company, he responds “Absolutely not true and ‘outrageously’ malicious!” He also denies any stipend, citing the rigorous integrity process each company must go through, and pointing to the number of small startups in the program:

These companies are mostly on incubation period of their platforms and marketing activities with no actual operations in the Philippines. In short, they have no revenue streams. Again, there is no reason for them to source out funds from the alleged P5-million weekly stipend, another malicious accusation that I categorically deny.

Tulfo, who is currently on an anti-corruption crusade in his column, has not returned to the topic of Lambino since his original broadside attack. He may be waiting for the CEZA CEO to complete his three-part rebuttal. He’s been pretty clear that he hopes some action will be taken against Lambino for these alleged acts of corruption, but no comment has been made as of yet.