Regulations for cryptocurrencies is being formulated by the authority of Filipino government-owned economic zone and the number of licenses it issues is limited to 25. Other regulations contain the requirement for each crypto exchange to invest at least US$1 million within 2 years. About 60 applications from crypto companies has been already sent to the authority.

Formulating Crypto Regulations

Filippino Cagayan Economic Zone Authority (CEZA) which is the government-owned and controlled corporation tasked to manage the development of the Cagayan Special Economic Zone and Freeportis, is “crafting rules to safeguard cryptocurrency investors,” reported by the Philippine News Agency, the newswire service of the government.

CEO and Administrator Raul Lambino, CEZA stated that CEZA was in the process of drafting regulations that would protect these cryptocurrency investors. And “will remain stringent in checking the probity and integrity of companies eyeing to launch their initial coin offering (ICO) in the country,” he added. These ICO companies would be registered with CEZA.

25 Licenses Only

Initially, CEZA indicated that 10 crypto firms will be allowed to capitalize of its tax advantages to generate employment.
Interviewed with the Reuters, Lambino told that they were about to license 10 platforms for cryptocurrency exchange. Korean, Japanese, Hong Kong, Malaysian. could do cryptocurrency mining, initial coin offerings, or exchanging. Those exchange of fiat money into virtual currency, and vice versa, were not legitimate in Phillipine so it should be done offshore.

However, recently in the Global Blockchain Summit, Lambino updated that number, emphasizing that CEZA would limit its crypto license to issue, from 10 revised to 25.
“Although CEZA will only issue 25 licenses, each exchange will have 20 to 30 sub-licenses for traders and brokers,” Lambino explained. About 60 applications from crypto companies has been already sent to the authority.

Preventing Scams

Additionally, Ponzi schemes would not be allowed, followed the regulations. For any companies with an ICO, the authority would have to find out if their ICO was asset-backed or they were scamming or not. Some ICOs might be able to convince 50 unsuspecting investors and promise them “the sun and the moon.” Lambino added:
“There are many operating scammers who set up an exchange with very little capital and they are victimizing investors…We do not want the Philippines to be a haven for scammers even if these scams are happening abroad. That’s why through our probity and integrity check we can determine if their transactions are just designed to entice unsuspecting people to invest in bitcoin or whatever crypto coin that is a fraud.”