Philippines Introduces New Rules for ICOs, STOs and Cryptocurrencies


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The Philippines, through the Cagayan Economic Zone Authority (CEZA), has released a comprehensive set of new rules governing cryptocurrencies in a bid to effectively regulate and protect investors.

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“The SRO model allows industry players to police its own ranks, while also promoting and protecting the interests of cryptocurrency investors. The rules will remain stringent in assessing the ethics and integrity of companies eyeing to launch Digital Asset Token Offerings” says Ma. Juanita Cueto, Chairperson of ABACA. “CEZA is moving forward with its goal to develop the economic zone as the center of fintech firms in Southeast and Northeast Asia.

CEZA has approved the Digital Asset Token Offering (DATO) regulations that cover the acquisition of crypto assets, including utility and security tokens. Under the new framework, CEZA is the principal regulating authority. The Asia Blockchain and Crypto Association (ABACA) is designated as a self-regulatory organization (SRO) to help implement and enforce the new rules.

“It is our goal to provide a clear set of rules and guidelines that will foster innovation yet ensure proper compliance by actors in the ecosystem. It is our hope that these set of regulatory innovations will take the digital asset sector one step closer to adoption and acceptance by institutions and the traditional financial system,” said Sec. Raul Lambino, CEZA administrator and chief executive officer.

“The safeguards built into CEZA’s rules and the system will lead to greater investor protection and transparency. The involvement of DA agents and experts bring in 2 competent and neutral third parties into the process to help ensure issuers are truthful and accurate,” Lambino explained.

Lambino added CEZA has built an ecosystem of OVCEs where tokens of issuers can be listed. CEZA and ABACA have also approved wallet providers and insured digital asset custodians to ensure proper storage and governance of investor proceeds. ABACA, as a newly-appointed SRO, will help the government regulate cryptocurrency companies by effectively converting industry players into enforcers. The SRO is enforcing a code of conduct among the members and reports to CEZA any breach, violations, or any matters relating to OVCE rules and regulations.

Under the rules, all DATOs must have proper offering documents with pertinent details on the issuer, project, and accompanying advice and certification of experts and DA Agents.

Tokens must be listed on the licensed Offshore Virtual Currency Exchange (OVCE) Stakeholders must also have confirmed arrangements with accredited wallet providers and custodians.

The regulations cover three levels of DATO. Tier 1 involves assets and investments not exceeding $5M with payment made in digital tokens. Tier 2 covers $6M to $10M in investments, while Tier 3 covers investments exceeding $10M. Utility tokens, also known as app coins or user tokens, give holders future access to the products or services offered by a company.

Security tokens, meanwhile, are backed by real assets such as equity, shares of a limited partnership company, or commodities. These are used to pay dividends, share profits, pay interest or invest in other tokens or assets to generate profits for the token holders. The power of the blockchain and digitization of securities and assets are seen to make a big impact on the fintech space in the long run.

CEZA’s new DATO rules will provide much-needed change to the industry and encourage innovators to use new technologies responsibly.

CEZA has emphasized that collaboration with locator fintech firms and industry players will help the government gain insights and keep up to date with innovations on the emerging markets. The economic zone authority is using research on national and international business standards to efficiently regulate the industries and licensees under its jurisdiction.

The economic zone authority has already approved and issued provisional principal offshore virtual currency exchange licenses to 19 companies engaged in the blockchain ecosystem industries.

The Asia blockchain & Crypto Association (“ABACA”) is a self-regulatory organization (SRO) granted under the authority of the Cagayan Economic Zone Authority (CEZA). ABACA self-regulates the code of ethics and compliance with best practices and industry standards for the financial technology firms operating within, or in affiliation with CEZA and ABACA members.

About Richard Kastelein

Founder and publisher of industry publication Blockchain News (EST 2015), partner at ICO services collective CryptoAsset Design Group ($500m+ and 50+ ICOs), director of education company Blockchain Partners (Oracle Partner) – Vancouver native Richard Kastelein is an award-winning publisher, innovation executive and entrepreneur.

He sits on the advisory boards of some two dozen Blockchain startups
and has written over 1500 articles on Blockchain technology and
startups at Blockchain News and has also published pioneering articles on ICOs in Harvard Business Review and Venturebeat

Ad honorem – Honorary Ph.d – Chair Professor of Blockchain at
China’s first Blockchain University in Nanchang at the Jiangxi Ahead
Institute of Software and Technology. In 2018 he was invited to and attended University of Oxford’s Saïd Business School for Business
Automation 4.0 programme. Chevalier (Knight) – Ordre des Arts et des
Technologies at Crypto Chain University and on advisory board of Advisory Board Member of International Decentralized Association Of Cryptocurrency And Blockchain (IDABC) as well as Advisory Board Member at U.S. Blockchain Association.

Over a half a decade experience judging and rewarding some 1000+
innovation projects as an EU expert for the European Commission’s SME
Instrument programme as a startup assessor and as a startup judge for
the UK government’s Innovate UK division. Kastelein has spoken
(keynotes & panels) on Blockchain technology in Amsterdam, Antwerp, Barcelona, Beijing, Brussels, Bucharest, Dubai, Eindhoven, Gdansk, Groningen, the Hague, Helsinki, London (5x), Manchester, Minsk, Nairobi, Nanchang, San Mateo, San Francisco, Santa Clara, Shanghai, Singapore (3x), Tel Aviv, Utrecht, Venice, Visakhapatnam, Zwolle and Zurich

His network is global and extensive. He is a Canadian (Dutch/Irish/English/Métis) whose writing career has ranged from the Canadian Native Press (Arctic) to the Caribbean & Europe

He’s written occasionally for Harvard Business Review, Wired, Venturebeat, The Guardian and Virgin.com and his work and ideas have been translated into Dutch, Greek, Polish, German and French.

A journalist by trade, an entrepreneur and adventurer at heart,
Kastelein’s professional career has ranged from political publishing to
TV technology, boatbuilding to judging startups, skippering yachts to
marketing and more as he’s travelled for nearly 30 years as a Canadian
expatriate living around the world

In his 20s, he sailed around the world on small yachts and wrote a
series of travel articles called, ‘The Hitchhiker’s Guide to the Seas’
travelling by hitching rides on yachts (1989) in major travel and
yachting publications. 

He currently lives in Groningen, Netherlands where he’s raising three teenage daughters with his wife and sailing partner, Wieke Beenen.

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