MANILA — Cagayan Economic Zone Authority (CEZA) Administrator and Chief Executive Officer Raul Lambino said the investment promotion agency (IPA) is in the process of crafting regulations that will protect those investing in cryptocurrency.
CEZA is eyeing to become a hub for financial technology (fintech) investments.
In a statement Tuesday, Lambino said CEZA will remain stringent in checking the probity and integrity of companies eyeing to launch their initial coin offering (ICO) in the country. These companies shall be registered with CEZA.
During the Global Blockchain Summit last weekend, Lambino mentioned that CEZA will limit its issuance of ICO licenses to 25.
He added that each crypto exchange will be required to invest at least USD1 million or around PHP53 million within two years and it must have a back office in the Philippines. Firms must also be registered with the Securities and Exchange Commission.
Although CEZA will only issue 25 licenses, each exchange will have 20 to 30 sub-licenses for traders and brokers, the IPA chief noted.
“If they have ICO we will have to find if their ICO is asset-backed because this what we are saying that there are many scammers. If they offer in the market their initial [digital] coin, they may be able to convince 50 unsuspecting investors and promise them the sun and the moon. This is the Ponzi scheme. We are not going to allow it,” said Lambino.
Ponzi scheme is an investment scam that promises clients with large return on investment with little or no risk at all.
“There are many operating scammers who put an exchange with very little capital and they are victimizing investors,” he said.
Lambino explained that in order to protect the investing public against this kind of fraud, “no one will be allowed to invest or trade in the ICOs by blocking the Internet Protocol or IP addresses of the exchanges”.
“We do not want the Philippines to be a haven for scammers even if these scams are happening abroad. That’s why through our probity and integrity check we can determine if their transactions are just designed to entice unsuspecting people to invest in Bitcoin or whatever crypto coin that is a fraud,” he added.
Last month, the CEZA chief said a USD100-million facility will rise in Cagayan Special Economic Zone and Freeport (CSEZF), which will house fintech companies.
CEZA has also signed agreements with 22 global fintech and blockchain firms that expressed their interests to locate at the CSEZF. (PNA)