The Securities and Exchange Commission said Monday it will not ban the so-called initial coin offerings in the country but will limit the sale of the digital tokens to accredited investors.
An ICO is a fund-raising activity usually by a start-up company that issues cryptocurrency or virtual coins to investors.
SEC commissioner Emilio Aquino said in a news briefing the corporate regulator would come up with rules regarding ICOs before the end of the year.
“We are not banning ICOs so long as [they are] able to comply and if we feel that concerns about investor protection are truly addressed, more likely we will allow it,” Aquino said.
Aquino said this type of investment should only be offered to people with deep financial literacy.
“We are looking possibly [to limit this offering] to accredited investors or those that can understand and have necessary background to understand ICOs,” Aquino said.
“But as it is now, small and big investors don’t under stand it yet. But we would like to believe that some people who have certain levels of financial literacy can understand the risks involved in this kind of investment,” he said.
Aquino said the SEC was sharing notes with US and Australian regulators on how to handle ICOs and digital tokens and to determine the best model for ICO regulations.
“This is virgin territory and people are still trying to understand this,” Aquino said.
Aquino said while the SEC would not want people to miss out on this investment and prevent technology from advancing, the corporate regulator’s main concern would remain protecting the local investors.
Meanwhile, Aquino said businessman Joseph Calata had five days to file with the SEC a motion for the lifting of the cease and desist order imposed against his three companies that were reportedly selling unregistered digital tokes under the name Krop Tokens and/or KropCoins to the public.
He said aside from Calata, the SEC was also investigating other companies the were reportedly selling ICOs to the public without getting approval from the commission.
“We also looking at other companies. But if there are complainants that will come forward that will say they got duped then they should come to us [and] file the necessary complaints,” Aquino said.