Philippines Regulator Collaborates with US Counterpart to Tackle Crypto Fraud
The Philippines Securities and Exchange Commission (SEC) has taken a step towards addressing the escalating issue of crypto scams, seeking assistance from its namesake and international counterpart, the US SEC.
The international partnership was announced via a Philippines SEC press release, published last Friday. The collaboration highlights the severity of a growing problem in terms of crypto-related fraud, underscoring the importance of inter-agency cooperation in tackling the issue.
Joint training efforts
Both SECs will engage in joint training sessions. The collaboration also involves cooperation with the Asian Development Bank (ADB), and it has been established under the umbrella of the International Organization of Securities Commissions (IOSCO). Notably, the Philippines SEC has also signed IOSCO’s Multilateral Memorandum of Understanding (MoU) aimed at addressing crypto scams.
The motivation behind these collaborative efforts is readily apparent given the scale of the cryptocurrency fraud that has occurred recently in the Philippines. Recent instances have captured the attention of the authorities, emphasizing the urgent need for regulatory action.
Drawing on overseas enforcement experience
Most in the crypto sector are not enamored with US SEC Chair Gary Gensler’s stance relative to digital assets. Notwithstanding that, it may be that his assertive approach to enforcement may have a place in the Philippine context, given the extent of the issue of crypto fraud in the Southeast Asian country. For example, Gensler’s call for “more cops on the beat” to police the crypto industry, expressed in a Bloomberg Daybreak Podcast interview in July, resonates with the Philippines’ current predicament.
Though Gensler’s remarks have been met with resistance from some quarters within the crypto industry, they may serve as sage advice in a climate where crypto-related crimes proliferate.
Philippines SEC Chair Emilio Aquino outlined that the collaborative workshop involving the two securities commissions was aimed towards strengthening the capability of the Philippines’ SEC enforcement personnel in conducting investigations on securities-related crimes like insider trading, market manipulation, off-market fraud, and crypto scams.
Aquino stated: “Scammers are becoming more advanced and sophisticated in their techniques as new technologies arise. As such, the SEC must constantly improve its investigation and enforcement capabilities to ensure that we are always one step ahead in preventing scams.”
The Philippines, in particular, could benefit from a more robust regulatory presence to combat human trafficking networks and quash scams that tarnish the reputation of the crypto sector. These criminal activities have unfortunately led many to associate cryptocurrencies with fraud.
The Philippines SEC Chair added that collaboration with US regulators and other enforcement agencies would likely guide the country in its pursuit of initiatives that lead towards the protection of the investing public.
While expert training is essential, bolstering regulatory oversight, as suggested by Gensler, may be the key to mitigating the pervasive problem of crypto-related crime and protecting the integrity of the cryptocurrency sector.
