Crypto Licensing Requirements in the Philippines: SEC Guidelines for CASPs

When dealing with crypto in the Philippines, Crypto Asset Service Provider (CASP) is a regulated entity that offers exchange, wallet, brokerage or other digital‑asset services under the Securities and Exchange Commission’s (SEC) 2025 framework. The SEC’s latest Memorandum Circulars (MC4‑2025 and MC5‑2025) turned a previously open market into a tightly supervised ecosystem, requiring anyone who wants to serve Filipino users to obtain a proper license.

Why the SEC Tightened the Rules

Crypto adoption in the archipelago is climbing fast-about 10.5% of the population will hold digital assets by the end of 2025, translating to nearly 13million users and ₱1.1billion in annual crypto revenue. That growth attracted fraudsters, money‑laundering schemes, and volatile projects, prompting the SEC to act. The agency’s stated goal is simple: protect investors while keeping the market open for compliant players.

Core Licensing Requirements

All aspiring CASPs must meet four foundational criteria:

1. Domestic incorporation: Companies must register as a Philippine corporation with the SEC.
2. Paid‑up capital: A minimum of PHP100million (≈$1.8millionUSD) in cash capital, excluding crypto‑asset holdings.
3. Physical office: A brick‑and‑mortar presence, complete with a registered address and a team of local staff.
4. Compliance infrastructure: Robust AML/KYC systems, risk‑control mechanisms, and a documented disclosure plan.

These pillars are enforced by the PhiliFintech Innovation Office, the SEC unit that processes applications and conducts ongoing supervision.

Capital, Office, and Documentation Checklist

Below is a quick cheat‑sheet of what you’ll need before you submit the application:

• Certificate of Incorporation and By‑Laws (SEC‑registered).
• Bank‑certified proof of PHP100million paid‑up capital.
• Lease agreement or title deed for a physical office in Manila, Cebu or Davao.
• Detailed business rules covering each crypto‑related service you intend to offer.
• AML/KYC policy aligned with the Anti‑Money Laundering Council (AMLC) guidelines.
• Risk‑management framework describing incident response, cyber‑security, and fund‑segregation procedures.
• Marketing and disclosure plan that complies with MC4‑2025 (see the next section).

Anti‑Money Laundering and Know‑Your‑Customer Obligations

CASPs must integrate real‑time AML screening tools that flag suspicious transactions. Reports-namely the Suspicious Transaction Report (STR) and the Periodic Transaction Report (PTR)-must be sent to both the SEC and the AMLC within the timelines set out in the regulations (usually within five business days). Failure to do so can trigger fines ranging from ₱50,000 to ₱10million per violation, plus a daily penalty of ₱10,000 for continued non‑compliance.

Marketing, Public Offerings, and Disclosure Rules

The SEC does not ban crypto trading, but it strictly controls how a CASP can market its services. According to MC4‑2025:

• Any token sale, ICO, or private‑placement must be disclosed in a filing that is posted on the company’s website and social channels at least 30days before the first marketing material goes live.
• Prospectus‑style documents must contain clear risk warnings, the nature of the token, and a statement that the SEC does not guarantee future price performance.
• Claims about “future appreciation” are only allowed under Section5.3, which limits language to “potential upside based on market dynamics” and requires a balanced view.

Non‑compliant marketing can lead to a ₱1million penalty per breach, plus an order to cease all promotional activities.

Fees, Reporting, and Ongoing Supervision

Fee calculation is revenue‑based. The SEC charges a quarterly licensing fee of 0.5% of gross revenue up to ₱10million, and 0.3% for revenue beyond that threshold. In addition, CASPs must submit:

1. Monthly financial statements audited by a Philippine‑accredited auditor.
2. Quarterly AML audit reports reviewed by the AMLC.
3. Quarterly compliance certificates signed by the company’s Chief Compliance Officer.
4. Annual public disclosure of the segregation of client funds, typically held in a separate custodial account with a local bank.

Failure to file on time incurs a ₱20,000 late‑filing surcharge per report.

Enforcement Highlights Since July2025

The SEC’s crackdown began in earnest on July5,2025, when it warned that operating without a CASP license is a violation of the law. The most visible actions include:

• August1,2025 - Public advisories targeted ten major exchanges (OKX, Bybit, KuCoin, Kraken, among others) for serving Filipino users without a license.
• 2024 - Binance was blocked after a 90‑day exit window was forced on its local users.
• Recurrent fines on platforms that continued to run unregistered promotional campaigns, with penalties per violation ranging from ₱50,000 to ₱10million.

These moves signal that the SEC will not hesitate to block websites, seize domains, or pursue criminal charges for repeat offenders.

Step‑by‑Step Guide to Secure a CASP License

1. Form a Philippine corporation: File Articles of Incorporation with the SEC and obtain a Tax Identification Number (TIN).
2. Raise PHP100million capital: Deposit the cash into a local bank and obtain a bank certification.
3. Secure a physical office: Sign a lease or purchase agreement and register the address with the local Barangay.
4. Develop compliance policies: Draft AML/KYC, risk‑management, and fund‑segregation manuals that satisfy AMLC and SEC standards.
5. Prepare the application packet: Include corporate documents, capital proof, office lease, business rules, and all compliance policies.
6. Submit to the PhiliFintech Innovation Office: Upload the electronic dossier through the SEC’s online portal, pay the initial application fee, and await a preliminary review (usually 30days).
7. Address feedback: The SEC may request clarifications or additional documents; respond promptly.
8. Obtain the license: Once approved, you’ll receive a Certificate of Registration valid for three years, renewable upon submission of updated financials and compliance reports.
9. Launch operations: Begin offering crypto services only after the 30‑day pre‑launch disclosure is posted and all AML/KYC tools are live.

Throughout the three‑year term, expect quarterly inspections and random audits by the SEC and AMLC.

Pros and Cons for International Exchanges

Future Outlook

Analysts expect the Philippines to become a regional hub for compliant crypto activity, especially as neighboring countries look to emulate its framework. The SEC has hinted at possible refinements-such as tiered capital requirements for smaller “crypto‑facilitator” licenses-based on feedback from industry players like Bybit and Cex.io. If those adjustments materialize, the market could open up to a broader set of global exchanges while retaining strong investor safeguards.

Bottom line: the Philippines now offers a clear, though demanding, path for crypto businesses that want to operate legally. By meeting the capital, office, and compliance thresholds, you gain the trust of a rapidly growing user base and avoid costly enforcement actions. For companies ready to invest in a regulated environment, the crypto licensing Philippines process is a strategic move toward long‑term market credibility.