SEC Issues the Rules On Crypto-Asset Service Providers Relevant To Its Public Offering And Marketing

On 30 May 2025, the Securities and Exchange Commission (“SEC”) issued Memorandum Circular No. 4, Series of 2025 (“MC 4-2025”),  which created the rules on Crypto-Asset Service Providers (“CASPs”) and third-party service providers which aims to regulate engagement in the marketing of crypto-assets and crypto-asset services. The issuance tackled the requirements for public offering and marketing of crypto-assets and securities in the Philippines, which is applicable to all CASPs that are offering crypto-asset services and third-party service providers who engage in the marketing of crypto-assets and crypto-asset services.

Public Offering of Crypto-Assets

MC 4-2025 requires that crypto-assets shall not be sold, offered for sale, or distributed in the Philippines without complying with the provisions of the rules. It requires the CASP to produce a disclosure document relative to a crypto-asset to be offered which would be filed by the offeror with the SEC and published on the platform’s website, social media account, and other means of communication not less than thirty (30) days before any marketing activities or the actual offering, whichever comes first. The document must contain certain information provided by the SEC but it was clarified that such document shall not contain any assertions as regards the future value of the crypto-asset other than the statements allowed under Section 5.3 of MC 4-2025.

The SEC has also introduced exceptions wherein crypto-assets may be sold, offered for sale, or distributed in the Philippines without complying with the Rules. This includes crypto-assets offered: (1) for purposes other than as a financial product, as defined under R.A. 11765 or the Financial Products and Services Consumer Protection Act, (2) in accordance with Section 6 of the Rules (Public Offering of Crypto-Asset Securities), (3) in accordance with issuances or within the regulatory purview of other Philippine regulatory agencies, and (4) other crypto-assets offerings as may be determined by the SEC as exempt from this requirement. Additionally, it was highlighted that entities offering crypto-assets to the public must still comply with Anti-Money Laundering laws and Rules.

Public Offering of Crypto-Asset Securities

For crypto-asset securities, these may be sold or offered for sale or distribution when (1) there is a registration statement filed with and approved by SEC and (2) prior to its sale, the information on the crypto asset shall be made available to each prospective purchaser.

Marketing of Crypto-Assets and Crypto-Asset Services

In marketing or inducement to purchase crypto-assets or crypto-asset service, persons or entities are required to be registered as a corporation under Philippine laws and obtain the necessary licenses from the concerned regulatory agencies before being allowed to do so. However, persons or entities are not required to register as a corporation when they engage the services of a third-party service provider for the marketing or inducement of crypto-assets or crypto-asset services. 

Aside from the registration and license requirement, it is compulsory that all forms of marketing to the public must be in plain, clear, and concise language that accurately and sufficiently discloses the product or service provided as well as the associated risks in a manner that is not misleading in both substance and presentation. In all marketing materials, the CASP or their third-party service providers must indicate that (1) it is registered with the SEC and (2) its registration number.

Liability of a Crypto-Asset Service Provider on the Acts or Omissions of its Authorized Representatives

MC 4-2025 provides for the liability of crypto-asset service providers on the acts or omissions of its directors, trustees, officers, employees, or agents in marketing, distributing, and transacting with financial consumers for its crypto-asset or crypto-asset services. Also, CASPs are solidarily liable with the accredited third-party service providers for their acts or omissions in marketing, distributing, and transacting with financial consumers for its crypto-asset services.

Administrative sanctions of the SEC is also applicable to a CASP, its directors, officers, employees, representatives or agents for violation of the Rules while persons found responsible may be imposed a fine of no less than Fifty thousand pesos (P50,000.00) nor more than Ten million pesos (P10,000,000.00) for each instance of investment fraud plus not more than Ten thousand pesos (P10,000.00) for each day of continuing violation in addition to the other administrative sanctions under Section 54 of Republic Act No. 8799. 

Despite this, settlement offers are allowed at any time during an investigation or proceeding wherein the parties being investigated and/or charged may propose in writing an offer of settlement with the SEC. The Commission may only agree to a settlement offer based on its findings that such a settlement is in the public interest and that it would only have legal effect until publicly disclosed.

The full text is available in this link.