Filipino regulator warns against foreign crypto service providers

The principal regulator of the cryptocurrency industry in the Philippines, the central bank of the Philippines, has issued a warning to investors not to conduct business with unregistered or international crypto service providers. According to the regulatory body, these issues “may provide significant obstacles on enforcing legal consequences and consumer protection and redress processes for local clients, among other issues.”

Warnings Issued by the Philippine Central Bank Regarding Cryptocurrency

On Tuesday, the Bangko Sentral ng Pilipinas (BSP), the Philippines’ central bank, issued a public warning to the general public regarding unregistered and international crypto service providers. The primary regulator of the cryptocurrency industry in the Philippines is the country’s central bank.

In the announcement, it is stated that

The Central Bank of the Philippines (Bangko Sentral) strongly warns the general public not to deal with virtual asset service providers (VASPs) that are either unregistered or headquartered in a country other than the Philippines.

As of the month of June, the website of the central bank reveals that 19 VASPs have been registered.

The central bank explained that in addition to the risk of price volatility associated with virtual assets (VAs), VASPs that are based outside of the country “may present additional challenges on enforcing legal recourse and consumer protection and redress mechanisms for local customers, among other things.”

The Bangko Sentral underlined the following points:

Transactions using VA are typically regarded as high-risk transactions because they have the potential to result in enormous monetary losses owing to fluctuations in price.

In addition, the central bank issued a warning that the government does not guarantee protection against financial losses that are the result of fluctuations in the price of cryptocurrencies. Prior to engaging in VA-related activities, “the public should exercise caution, conduct their own due diligence, and always be mindful of the risks,” the regulator underscored. “The public should exercise caution, operate their own background research.”

The Philippines’ Central Bank, the Bangko Sentral ng Pilipinas, has urged the general people to promptly report to the central bank any illegal acts that are enabled by cryptocurrencies and/or crypto service providers.

The announcement that the central bank would halt accepting new VASP license applications for three years, beginning on September 1st, was made the week before last. According to the explanation provided by the regulatory body, its “goal is to strike a balance between supporting innovation in the financial industry and ensuring that associated risks remain within reasonable levels.”