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Philippines: SEC teams up with UP Law Center to research digital currency, fintech regulation

The Securities and Exchange Commission (SEC) in the Philippines has announced a partnership with the University of the Philippines Law Center (UPLC) for research on virtual currency regulation.

Both parties signed a memorandum of understanding (MoU) back in January, which would see the collaboration extend to fintech regulation, the Manila Times reported. Kelvin Lester Lee, a commissioner with the SEC, noted that the partnership was born out of the securities watchdog’s need for digitalization and achieving “innovation through regulation.”

“I am confident that with this collaboration and joint effort, the SEC will gain a better understanding that will enable us to do far more in terms of introducing innovative financial technology into our local markets through different research topics, focus group discussions, and public fora that will be conducted under this project,” Lee said.

Parties to the agreement confirmed that the high-profile implosions in the industry have made it imperative for regulators to take an innovative approach to control the industry. FTX’s implosion and its ripple effect were cited as a core reason for the partnership as the country looks to protect investors from repeating the black swan events.

“We were about to issue these rules, but the crash of several digital asset companies compelled us to revisit them. We just can’t discount the key information that led to their downfall. The research of the UPLC will be vital to the crafting of these regulations, and in guiding us for future regulations,” SEC Chairman Emilio Aquino said.

The Philippines’ digital currency industry has been described as one of the fastest-growing in Southeast Asia. Although regulators continue to view the asset class with a strong measure of doubt, the Philippine Economic Zone Authority (PEZA) has been moving to attract more virtual currency service providers to set up operations in the country.

The public advisories roll on

Meanwhile, the SEC’s crusade against bad actors in the digital currency space continued as the commission issued a strongly worded public advisory against BitPrime and its other trading names. 

According to the SEC, BitPrime’s move to solicit investments from the general public amounted to a violation of the country’s securities laws. The warning added that the company “bears the hallmarks of Ponzi Schemes,” which “is detrimental to subsequent members in case of scarcity of new investors.”

Since the start of the year, the SEC has been on a rampage with a flurry of advisories against firms offering unregistered securities to the public. In 2022, the SEC issued nearly 80 such advisories while carrying out enforcement actions against serial offenders.

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