Philippines Bans Privacy Coins, Tightens Crypto Listing Rules

For issuer checks, firms are expected to review incorporation papers, audited financials, ownership structures, beneficial owners, and the fitness of individuals behind projects, alongside any potential conflicts of interest. Market maturity will be assessed by factors such as market capitalization, 30-day trading volume, the number of on-chain holders, the token's time in the market, and the exchanges it is listed on. Whitepapers, detailing tokenomics, supported blockchains, and disclosed risks related to money laundering, terrorist financing, cybersecurity, and governance, must be accessible to customers.

Asset-backed and fiat-backed tokens, including stablecoins, face additional scrutiny. VASPs must examine the entire lifecycle of these coins, from minting to burning, and verify the composition of their reserves. The BSP emphasized that these factors are crucial for determining a virtual asset's ability to meet redemption demands, support market stability, and maintain public trust.

The memorandum also mandates continuous monitoring of listed tokens. VASPs are required to set thresholds for deviations from established standards that would trigger delisting. The regulator specified that tokens should be suspended or removed immediately in cases of legal non-compliance, cybersecurity issues, consumer protection risks, misleading disclosures, market abuse, or abnormal price movements.

Last year, the Philippine Securities and Exchange Commission (SEC) issued warnings against ten unlicensed crypto exchanges, including OKX, Bybit, and Kraken, for operating without authorization. The SEC noted that these platforms lacked the necessary licenses or registrations to operate or solicit investments locally, posing significant risks to Filipino investors.