Ignorance of Filipinos about investing in virtual currencies opens opportunities for cybercriminals, the Securities and Exchange Commission (SEC) said last week.
With the rising popularity and value of digital currency globally, there is also an equal need of increasing one’s knowledge in entering the cryptocurrency market, SEC Commissioner Ephyro Luis Amatong stressed during the panel discussion on “Demystifying Blockchain in the Age of Disruptions” in Makati City.
“[Fraudsters] take advantage of the fact that people don’t know where they are investing in … A fraudster will take advantage of a person’s ignorance. That’s their main road of stealing your money,” he said.
Amatong reiterated that people wanting to invest a large amount of money in cryptocurrency must be vigilant and inquisitive.
“What we always say at the SEC is be aware of what you’re doing when you invest your money. Ask questions. ‘Is this thing registered? Are there telltale red flags?’” he added.
In January SEC expressed its desire to craft regulations on initial coin offerings (ICOs) to guard Filipino investors from fraudsters.
“We are really trying to come out with regulations for ICOs. For now, we want to also come out with our own set of regulations, and the best that we could under the current circumstances is just to consider the Securities Regulation Code,” SEC Chair Emilio Aquino told reporters earlier.
Aquino said the regulator was looking at crowdfunding requirements, but no decisions have emerged yet as “it only addresses accredited investors for a limited period of time.”
Crowdfunding is a fundraising exercise to finance a project or venture happening via internet.
Given this, the Commission was in talks with its Australian counterparts and a US-based fintech group to learn more about ICO models. Aquino noted the Commission was open-minded about this, particularly for remittance purposes as Filipino overseas workers are expected to benefit from “lower costs and faster money transfer.”
“So long as you are able to comply, you submit to us and we feel that investor protection issues are duly addressed and we get to safeguard our investors, and then of course following strict disclosure requirements under the SRC, then more or less we will allow it,” he stressed.
The Bangko Sentral ng Pilipinas (BSP) also released the Circular 944 stating rules and regulations concerning the virtual currency exchanges versus money laundering and terrorist financing.
“We have actually allowed the use of cryptocurrency in remittance services, but we also impose obligations to fullfill anti-money laundering commitments,” BSP Governor Nestor Espenilla Jr. told reporters in October 2017.
Espenilla said the Philippines acknowledged this innovation to increase financial inclusion and to improve the financial system.
“We also realize pragmatically that even as we talk, it grows, whether or not we like it. So rather than prohibit something that is very hard to prohibit anyway, we chose to engage, and the industry has accepted that engagement to the BSP,” he said.
The central bank’s latest data said the monthly average transaction values in bitcoin surged from $2 million in 2015 to $6 million last year. /Business Times – BY MA. LISBET K. ESMAEL ON
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