Initial coin offerings (ICOs) can easily net millions of dollars from enthusiastic investors, but a number of countries are starting to regulate them. The Philippines is the latest country to join this growing club.
The vast surge in cryptocurrency value and popularity, especially Bitcoin, over the last couple of years took many sovereign governments and major financial institutions by surprise. The blockchain has led to a massive explosion in platforms, each looking to generate revenue through a token sale. While slow to react to this new phenomenon, a number of countries are starting to regulate these initial coin offerings (ICOs), and the Philippines is the latest one to join this list.
Bitcoin Extremely Popular in the Philippines
The central government in the Philippines has been looking pretty hard at cryptocurrency and ICOs for some time. The primary reason for this is that so many Filipinos working abroad have been using Bitcoin and other digital currencies to send money home as it’s quicker, easier, and cheaper than using banks.
The increasing use of cryptocurrency led the country’s Securities and Exchange Commission to begin looking at ways to regulate ICOs and exchanges in order to protect consumers. SEC Commissioner Emilio Aquino recently said:
This initial coin offering — depending on, as said, the facts and circumstances in which the offering is made especially in raising capital — may be considered as securities, in which case they cannot just be offered without registering with SEC… That’s the direction we’re taking, basing on the present regulations passed by the US SEC, our other counterparts in Malaysia, Hong Kong and Thailand.
Increased Oversight Becoming More Common
Currently, the country’s central bank, Bangko Sentral ng Pilipinas, is talking with the SEC on how best to regulate and oversee ICOs. Bank commissioner Ephyro Amatong has stated:
The SEC is concerned about possible unlicensed investment-taking activity or otherwise selling of investment contracts in the guise of so-called cryptocurrencies via a so-called initial coin offering.
What is interesting is that cryptocurrency firms in the Philippines have welcomed this regulation. This is understandable as the country is not looking to ban ICOs (like China) but is taking steps to crack down on fraud, which helps bolster public confidence over the long haul. The regulatory movement has been spreading across the world. There’s been a global regulation effort spearheaded by the Russian Association of Blockchain and Cryptocurrency (RACIB) that encompasses 30 countries. The United States has a cyber unit within the SEC, and the unit recently shut down the ICO of a company called PlexCorps for alleged fraud.
While some may bemoan any kind of ICO regulation, it’s fully understandable that a government will actively work to stop any kind of financial scam, especially when the typical ICO can easily net millions of dollars. Of course, some cynical people might suggest that national governments are also looking to get a slice of that financial pie for themselves.
What do you think about the Philippines regulating ICOs? Do you think ICOs should be regulated at all? Let us know in the comments below.
Images courtesy of Wikimedia Commons, Good Free Photos, and Bitcoinist archives.
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