MANILA – A think tank on Wednesday urged regulators to boost its efforts against unlicensed cryptocurrency platforms, following the introduction of the Securities and Exchange Commission’s (SEC) Strategic Surveillance and Enforcement Sandbox (StratBox).  

The SEC in late April unveiled its StratBox for crypto asset service providers or CASPs which sought to allow firms to test products or services in a live but controlled setting.  

This, in turn, will supposedly give regulators the freehand to assess risks. In a statement, while Infrawatch described this as a “progress” in cryptocurrency regulation, more effort is needed to “close enforcement gaps that enable unregistered platforms to facilitate fraud and abuse.” 

“The sandbox model supports innovation but only for regulated and licensed entities. The use of crypto for illicit activities remains rampant particularly on unregulated and unlicensed firms, and the government should crackdown on firms operating in the Philippine market,” said Infrawatch convenor Terry Ridon.  

“Compliant players are subject to strict regulatory requirements, while unlicensed entities often operate with fewer restrictions, creating a distorted environment where non-compliance appears more profitable,” added Ridon.  

The convener said unlicensed cryptocurrency platforms were used for online scams, money laundering, and other illegal activities.  This was why the SEC should work more closely with the National Telecommunications Commission (NTC) to restrict illegal platforms “similar to the agency’s earlier move to block Binance from operating in the country without proper registration.” 

“Crypto entities working with the government through a regulatory framework which gives importance to transparency and accountability while allowing entities to create new products and services to fill various gaps in the market,” he said.  

The SEC recently issued stricter rules on CASPs amid the continued growth and development of new crypto-asset markets and services in the Philippines.  

CASPs, according to the SEC, should be responsible for the activities of its directors and employees, or even agents in marketing, distribution, and transaction with financial consumers.  

The regulator emphasized that CASPs are “solidarily liable” with the accredited third-party providers for their activities or omissions.  Further, the SEC imposes a fine of at least P50,000 but not more than P10 million to individuals found responsible for each instance of investment fraud aside from the administrative sanctions under the SEC Code.  

The whole copy of the SEC rules on CASPs can be read here.