Philippines SEC Joins US and ADB In Combatting Crypto Crime

The Philippines Securities and Exchange Commission (SEC) is joining forces with its U.S. counterpart and the Asian Development Bank (ADB) in an effort to combat cryptocurrency-related crimes and enhance its enforcement capabilities. This collaborative approach is a response to the increasing sophistication of scammers and the evolving nature of financial fraud in the digital age.

The partnership, which includes the International Organization of Securities Commissions (IOSCO) Investigation and Enforcement Training workshop held in August, aims to equip the Philippines SEC with the necessary tools and expertise to investigate and prevent a range of securities-related crimes. These crimes encompass insider trading, market manipulation, off-market fraud, and the growing issue of crypto scams.

Emilio Aquino, Chairperson of the Philippines SEC, emphasised the importance of staying ahead of scammers' tactics, stating that "Scammers are becoming more advanced and sophisticated in their techniques as new technologies arise. As such, the SEC must constantly improve its investigation and enforcement capabilities to ensure that we are always one step ahead in preventing scams."

The collaboration involved knowledge sharing with representatives from the U.S. SEC and ADB, who shared their experiences and techniques in apprehending investment scammers and pursuing legal actions against them. The discussions also centred on the significance of utilising the global network of IOSCO for information sharing, emphasising the importance of international cooperation in combating financial crimes.

One key outcome of this partnership was the ratification of the IOSCO Multilateral Memorandum of Understanding (MMoU) on crypto crime on August 18. This multilateral instrument, established in 2002, facilitates cross-border cooperation among signatories, particularly in exchanging information for regulatory enforcement in the securities market.

The Philippines SEC not only seeks to bolster its enforcement capabilities but also advocates for the development of stronger enforcement laws aligned with IOSCO standards. This commitment underscores the nation's determination to crack down on illicit activities involving digital assets.

However, the Philippines has faced challenges in regulating the cryptocurrency space. The release of its regulatory framework for crypto assets, originally slated for late 2022, was delayed until 2023. Aquino clarified that this delay was intended to exercise caution and ensure that the public is protected from potential risks associated with cryptocurrencies. The country's central bank and SEC have consistently warned citizens against engaging in foreign crypto exchanges, expressing concerns about investor protection.

Nonetheless, the Philippines remains an attractive destination for cryptocurrency adoption and investment. With over 11.6 million Filipinos owning digital assets, it ranks 10th worldwide in terms of crypto adoption. This juxtaposition highlights the country's need to strike a balance between fostering economic growth through cryptocurrency and implementing robust regulatory oversight.

In conclusion, the collaborative efforts between the Philippines SEC, the U.S. SEC, and the Asian Development Bank represent a significant step forward in addressing cryptocurrency-related crimes. However, the Philippines faces the complex challenge of regulating the crypto space while harnessing its economic potential. The coming months will be critical in shaping the nation's approach to digital assets and their oversight.