The Philippines’ Securities and Exchange Commission (SEC) has warned investors to be careful when investing in ICOs, urging them “to take the necessary precautions in dealing with ICO entities.”
In their statement the SEC identifies that “certain companies, individuals or groups of persons” have been encouraging investment through websites and social media.
“If it sounds too good to be true…”
Any such people pursuing “solicitations and recruitment through the internet must be registered with the SEC”. As reported in November, Philippines authorities had then advised that they considered ICO tokens to be securities and SEC Commissioner Emilio Aquino pointed out that ICOs “cannot just be offered without registering with SEC”.
Bringing ICOs under the regulatory umbrella of the SEC was deemed necessary after a company that had been delisted from the Philippine Stock Exchange turned to the ICO model to raise capital.
In the statement, the Philippine’s financial regulators also warned the public that unlike other securities ”virtual currencies are neither guaranteed by any Central Bank nor backed by any commodity”.
Until recently, Philippine authorities had tended to adopt a relaxed position in relation to cryptocurrencies. That all changed last November when at least one company had tried to fly under its radar using the newly emerging crowd-funding mechanism.
Nonetheless, rather than taking the Chinese approach of an outright ban, they appear to be leaning towards vigilance and regulation at this stage.
Last month Philippine central bank deputy director Melchor Plabasan underlined that they did “not endorse virtual currency as a currency because it is not a currency,” while yesterday’s SEC announcement reminded everyone that “if a potential investment sounds too good to be true… please exercise utmost caution.”