Philippine Regulatory Alert on Unregistered Cryptocurrency Exchanges
The landscape of digital asset trading in the Philippines is under scrutiny as regulatory authorities issue a stern caution to traders engaging with cryptocurrency platforms that lack proper local authorization. This warning comes in light of recent developments and findings by the Philippine Securities and Exchange Commission (SEC).
Unlicensed Operations: A Growing Challenge
The SEC has revealed that 10 major cryptocurrency exchanges are conducting operations in the country without adhering to the new regulatory requirements that were implemented on July 5, 2025. This list of non-compliant exchanges includes prominent names such as Bybit and OKX, which are actively marketing their services despite the lack of authorized registration. Others like Kraken, MEXC, KuCoin, Bitget, Phemex, CoinEx, Bitmart, and Poloniex also feature prominently as unregistered entities.
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These platforms engage in activities such as buying, selling, and derivatives trading without having completed the necessary registration process as outlined in Memorandum Circulars No. 4 and No. 5, Series of 2025. These memoranda require crypto-asset service providers to meet specific disclosure, security, and anti-money laundering criteria to operate legally within the country.
Risks of Unregulated Trading
Despite global efforts to ensure compliance, the SEC has observed that many of these exchanges are targeting Filipino consumers with aggressive promotional strategies. This includes localized mobile applications and influencer endorsements that promote reduced trading fees. Such tactics have raised concerns, as demonstrated by Binance’s recent decision to block Philippine IP addresses, emphasizing the SEC’s capability to enforce geo-restrictions.
The lack of registration poses significant hazards, including vulnerability to market manipulation and scams. Reports indicate a rise in identity theft on platforms that do not implement stringent know-your-customer (KYC) checks. The current total crypto market capitalization is approximately $3.64 trillion, highlighting the widespread impact of these unregulated activities.
Concerns Over Money Laundering
Investors utilizing unlicensed services face substantial risks, particularly in cases of hacks or fraudulent activities, as these platforms are not legally obliged to protect user data or report suspicious transactions. The Philippine Anti-Money Laundering Act mandates service providers to conduct customer due diligence and report significant or suspicious financial activities. However, without formal oversight, these unregistered exchanges create vulnerabilities that can be exploited for money laundering and terrorist financing.
The absence of regulation can lead to international scrutiny, with the Financial Action Task Force warning that nations permitting unregulated trading might be placed on a gray list, potentially damaging their global reputation.
Regulatory Actions on the Horizon
In response to these challenges, Philippine SEC officials are preparing to file criminal charges against platforms that persist in operating without a license, citing violations under the Securities Regulation Code (SRC) and the Financial Cybercrime Prevention Act (FCPA). They are also poised to seek judicial orders to block access to non-compliant websites and apps. Major tech companies like Google, Apple, Meta, and TikTok could be approached to remove advertisements and marketing content related to these exchanges. Cease and desist orders may be issued rapidly following formal complaints.
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