Think tank urges SEC to double efforts vs. unlicensed crypto exchanges 

Think tank Infrawatch on Thursday called on the Securities and Exchange Commission (SEC) to close enforcement gaps, which enable unregistered platforms to facilitate fraud and abuse.

Infrawatch convenor Terry Ridon said the SEC's Strategic Sandbox (StratBox), which allows licensed crypto asset service providers (CASPs) to test new products and services under regulatory supervision, was a timely measure that will promote innovation in the country’s digital asset ecosystem.

“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,” he said in a statement.

“If the SEC seeks strict compliance from licensed cryptocurrency exchanges, it should undertake stronger measures to crackdown on unlicensed exchanges operating in the Philippines, particularly through advisories warning the public against investing in these firms,” Ridon added.

Launched in May, the StratBox was designed to give registered crypto firms a controlled environment to develop and deploy digital financial products while allowing regulators to assess associated risks.

Ridon said the SEC should work closely with the National Telecommunications Commission (NTC) to implement access restrictions on illegal platforms, similar to the agency’s earlier move to block Binance from operating in the country without proper registration.

“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,” Ridon said. 

“This sends the wrong signal to the market and undermines confidence in the regulatory framework,'' he added. 

Ridon pointed out that any push to develop the digital asset sector should be grounded in a strong system of transparency, accountability, and law enforcement.

GMA News Online has reached out to SEC for comment. — BM, GMA Integrated News