Securities and Exchange Commission (SEC) Commissioner Rogelio Quevedo warned digital asset companies last Friday against launching without proper permits, stating that violators will face steep penalties.
Speaking during Philippine Blockchain Week, Quevedo revealed that three platforms that offer crypto must pay outstanding fines of approximately 20 million pesos before they can be admitted into the SEC’s “StratBox” regulatory sandbox. According to the Commissioner, the penalties were levied because the platforms had already begun operating and offering digital assets to local investors before obtaining the necessary regulatory approvals.
Enforcement Action and Google Takedowns
The enforcement action follows the SEC’s coordination with Google to remove the unauthorized applications from its store, which restricted their access to Philippine investors. According to Quevedo, the platforms approached the SEC after their applications were taken down.
“Before they can get approved the sandbox, we have to collect the penalties that we have imposed on them,” Quevedo said. He noted that the commission discovered the unauthorized operations a year to two years ago and imposed fines ranging from 5 million to 20 million pesos.
“It is unfortunate that they started operating offering this cryptocurrency and other real world assets before they got the necessary regulatory approvals,” Quevedo added. “We were able to discover them and impose the penalties and we were able to convince Google to take them down.”
Regulatory Warning to Crypto Platforms
Quevedo delivered a message to cryptocurrency platforms wishing to register and operate in the country; he emphasized that technology cannot bypass compliance, and therefore, urged innovators to cooperate with the regulator rather than launching without permits.
“Please do not commit the mistake of launching without getting the necessary permits from the Securities and Exchange Commission because you will be fined and penalized accordingly,” Quevedo stated. “I have three, cryptocurrency applicants who have come to us, and sad to say that before they can be admitted to the StratBox, they have to pay the penalty of about twenty million pesos.”
“If you entice Filipinos to invest or if you advertise in the Philippines, that means that you are getting revenues from the Philippines, and therefore you are subject to regulatory approvals.”
Rogelio Quevedo, Commissioner, SEC
“Yung penalties may, maybe they can apply for the reduction of penalties, but we have to make sure that the law is followed,” Quevedo stated.
He added that the SEC aims to determine a “reasonable penalty” as he does not want to impose “extinctive” or “punitive” fines. “While I have been saying that The regulator, particularly the SEC is open. Still, we have to show that these innovators must follow what the regulator, uh, what the law has imposed,” Quevedo said.
Quevedo delivered the message first in a panel during the event and then in a side interview with this reporter after it.
Quevedo’s Message During The Panel:
Quevedo: Please do not commit the mistake of launching without getting the necessary permits from the Securities and Exchange Commission because you will be fined and penalized accordingly. I have three, cryptocurrency applicants who have come to us, and sad to say that before they can be admitted to the StratBox, they have to pay the penalty of about twenty million pesos. We want to arrive at a reasonable penalty because I do not want to impose extinctive penalties, not even punitive penalties. That is why I said I came here to address. Technology cannot race past all of these things. We have to lead with the regulator. So yeah, I must say that, while the blockchain is the technology, we must cooperate with the regulator.
During the Side Interview:
Michael: At the end of your talk, you mentioned the companies applying for CASP and the StratBox. Specifically, you noted that three crypto platforms must pay a penalty before they can be admitted. Could you elaborate on that?
Quevedo: It is unfortunate that they started operating offering this cryptocurrency and other real world assets before they got the necessary regulatory approvals. We were able to discover them and impose the penalties and we were able to convince Google to take them down. That is why they are not able to get Philippine investors.
Now that Google has, has taken them down, they have realized that they have to go to the SEC and the SEC is requiring them to go through the sandbox. Now, before they can get approved the sandbox, we have to collect the penalties that we have imposed on them. And there are some companies on which we have imposed penalties like five million, ten million, twenty million. So before they can really be given permits, then they have to comply with the penalties that were imposed by the SEC when we discovered them sometime two years, a year ago.
We have to impose the necessary regulatory requirements. Yung penalties may, maybe they can apply for the reduction of penalties, but we have to make sure that the law is followed. While I have been saying that the regulator, particularly the SEC is open. Still, we have to show that these innovators must follow what the regulator what the law has imposed. But the regulator now is willing to come up with changes that will allow and encourage innovation.
Michael: Your final message to those who want to register in the Philippines?
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Quevedo: For those who wants to register and offer especially these real-world assets, I must say that please cooperate first with the regulator. Cannot hide with the fact that you are beyond the regulation of Philippine laws. Everything– If you entice Filipinos to invest or to– if you advertise in the Philippines, that means that you are getting revenues from the Philippines, and therefore you are subject to regulatory approvals.
This article is published on BitPinas: SEC Commissioner Says Three Crypto Applicants Must Pay Fines Before Sandbox Entry
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