SEC Defends Blocking of Unregistered Crypto Exchanges, Cites Ample Warning for Filipinos

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The Securities and Exchange Commission (SEC) pushed back against criticism that it abruptly moved to restrict unregistered international crypto exchanges in the Philippines, stressing that Filipinos had been given sufficient time to withdraw their funds before enforcement actions were taken.

Defends Foreign CEX Restriction

In a public webinar on August 27, 2025, the regulator explained through a reply in a comment on the livestream that the Crypto-Asset Service Providers (CASP) Rules were published on the SEC website on May 30, 2025, and in a newspaper of general circulation on June 4, 2025. The rules took effect on July 5, 2025, followed by a general advisory reminding the public to comply. (Read more: SEC Sets Effectivity Date of Crypto Asset Service Provider (CASP) Rules)

“The SEC is balancing the interest of protecting the future onboarding of Filipinos and current users who were supposed to off-board upon the effectivity of the CASP. The Commission cannot wait forever before we do an enforcement action. Essentially, waiting before carrying out an enforcement action must end at some point.”

Securities and Exchange Commission 

The Commission also emphasized that it does not prohibit any exchange from operating in the Philippines as long as they register and comply with the CASP requirements. (Read more: SEC Clarifies CASP Rules: Crypto Trading Not Prohibited, But Registration Now Mandatory)

The SEC also addressed questions about specific platforms such as Binance. It clarified that it does not single out or prohibit any particular exchange from operating in the country. 

“We would like to make it clear that the SEC does not prohibit any exchange, whether foreign or local, from operating and offering its services within the Philippines, provided it fully complied with the requirements set forth under the CASP Rules.”

Securities and Exchange Commission 

SEC and BSP: Difference in Regulating Crypto

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In the webinar, the SEC explained that its primary mandate is to oversee crypto asset service providers (CASPs), particularly platforms that offer crypto assets as investment products or securities. 

The agency’s rules require both local and foreign platforms to secure registration and licenses before conducting business in the country. These regulations, the SEC added, are aligned with international standards and focus on investor protection and market integrity.

The Bangko Sentral ng Pilipinas (BSP), meanwhile, regulates virtual asset service providers (VASPs) under guidelines issued in response to the Financial Action Task Force (FATF) recommendations.  (Read more: How to Get a VASP License in the Philippines for Crypto Exchanges)

• Its supervision centers on anti-money laundering and counter-terrorism financing compliance, particularly for transactions involving the conversion of fiat to crypto, crypto to fiat, or crypto-to-crypto exchanges. The BSP also serves as the primary regulator of payment systems, including those that use crypto.

“The SEC published the rules or issued the rules to cover trading activities in relation to crypto assets. As we know today crypto platforms would offer trading of crypto assets and we’d like to cover that activity since currently walang nagko-cover ng regulation over that. Since that is the very focus of most regulators around the world we’d also like some coverage over that. The ultimate objective naman for us is investor protection. We just want the market to have some level of protection in terms of trading, in terms of offering, so that the market can confidently invest in these kinds of products.”

Atty. Paolo Ong, Assistant Director, SEC PhiliFintech Innovation Office

Other Clarifications: Can Foreign Crypto Companies Employ Filipinos?

The webinar, part of the SEC Communication, Advocacy, and Network (SEC CAN!) initiative, also clarified several points raised by participants. The session, titled Frequently Asked Questions on Crypto-Asset Service Providers – Part 1, featured officials from the PhiliFintech Innovation Office and the Enforcement and Investor Protection Department. 

It also explained the basics of crypto, blockchain, smart contracts, and how scams like Ponzi schemes operate.

Officials from the SEC’s Enforcement and Investor Protection Department explained that regulation does not alter the decentralized nature of cryptocurrencies but instead provides safeguards similar to licensing in public transport. They said institutional investors and the public are more likely to participate in the market when there are protections and accountability in place.

“I just want to clarify one thing. We have yet to determine what decentralization really is. Is it that we don’t want any regulation at all in a certain industry? Para sa akin, this would not be very attractive to institutional investors in this industry. I think to recall back in 2020, the market cap of the crypto industry was barely half a trillion dollars, siguro mga 400 billion dollars; where this year I think if my data is correct, it reached already 4 trillion because this is the effect of actually attracting institutional investors because naturally kapag institution you would like some sort of protection.”

Atty. Patrick-Duane V. Patricio, SEC Assistant Director, EIPD Cyber and Forensics Division

The agency also acknowledged that some platforms claiming to be “decentralized” still maintain elements of centralization, such as teams controlling updates or overrides, underscoring the need for oversight to protect users against bad actors.

In the comment section, the Commission also answered other questions. The SEC noted that the CASP rules primarily regulate the offering of crypto assets, not employment, although Filipinos engaged to market unregistered exchanges in the country would be covered.

On cross-border enforcement, the SEC said it could issue public advisories, cease-and-desist orders, or even geo-block access to offshore platforms targeting Filipinos. 

SEC: Red Flags to Watch Out For and Tips to Stay Safe

Red Flags:

• Guaranteed or unusually high returns
• “Risk-free” investment claims
• Recruitment-based earnings (Ponzi/pyramid schemes)
• Unregistered platforms or no SEC license
• No transparency or unclear business model
• Fake identities or hidden representatives
• Pressure tactics and “limited-time” offers
• Dubious trading platforms
• Romance scams or fake insider tips

Tips:

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