SEC warns public vs. dealing with unregistered play-to-earn, crypto platforms, foreign entities

The Securities and Exchange Commission (SEC) has warned the public against dealing with firms such as play-to-earn gaming platforms and crypto platforms that are not licensed or registered in the Philippines.

In an advisory posted on its official website, the SEC said it received numerous inquiries regarding the implications of transacting with foreign corporations with products available in the country but are not registered locally.

“The public is also advised to avoid transacting with corporations or entities without any registration or license to do business in the Philippines in order to avoid losing their earnings,” the advisory read.

“If an entity or an activity is unlicensed or unregistered and is based abroad, you run the risk of not getting your money back once these are transmitted outside of the Philippines.”

The SEC enumerated that some unregistered online platforms include, but are not limited to, the following:

• Foreign Currency (Forex) Brokers and Exchanges
• Digital Asset / Cryptocurrency / Virtual Asset Exchanges
• Decentralized Finance (DeFi) Investment Platforms
• Yield Farming / Staking Platforms
• Multi-asset / Multi-security Brokerage Companies
• Websites for Securities Token Offerings / Token Generation Events
• Illegal Investment Scheme websites
• Binary Options Trading applications
• Pay-to-Click / Captcha websites
• ‘Play-to-Earn Gaming’ platforms
• Various fiat / cryptocurrency gambling websites
• Various cryptocurrency-related investment websites

“If you put your earnings in a platform which is reachable in the Philippines, but is operated by non-registered corporations or entities, the government can offer very limited protection or, in some cases, no protection...” it said.

The regulator noted, however, that in case of any future conflict with the unregistered foreign entity, Filipinos can seek assistance from local courts that have jurisdiction.

Jurisdiction over fraud or any form of misconduct will fall under the jurisdiction of the foreign country where the firm operates, and Filipinos would have to go to the country where the platforms are registered should they have any complaints.  —Jon Viktor Cabuenas/KBK, GMA News