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Self-regulatory organization (SRO) to help enforce regulations, code of conduct

 

SINGAPORE - Media OutReach - 4 February 2019 - The Philippines, through the Cagayan Economic Zone Authority (CEZA), unveils acomprehensive set of new rules governing cryptocurrencies in a bid to effectively regulate and protect investors.

 

CEZA has approved the Digital Asset Token Offering (DATO) regulations that cover the acquisition of crypto assets, including utility and security tokens. Under the new framework, CEZA is the principal regulating authority. The Asia Blockchain and Crypto Association ("ABACA") is designated as a SRO to help implement and enforce the new rules.

 

"It is our goal to provide a clear set of rules and guidelines that will foster innovation yet ensure proper compliance by actors in the ecosystem. It is our hope that these set of regulatory innovations will take the digital asset sector one step closer to adoption and acceptance by institutions and the traditional financial system," said Sec. Raul Lambino, CEZA administrator and chief executive officer.

 

Under the rules, all DATOs must have proper offering documents with pertinent details on the issuer, project, and accompanying advice and certification of experts and DA Agents. Tokens must be listed on the licensed Offshore Virtual Currency Exchange (OVCE). Stakeholders must also have confirmed arrangements with accredited wallet providers and custodians.

 

The regulations cover three levels of DATO. Tier 1 involves assets and investments not exceeding $5M with payment made in digital tokens. Tier 2 covers $6M to $10M in investments, while Tier 3 covers investments exceeding $10M.

 

Utility tokens, also known as app coins or user tokens, give holders future access to the products or services offered by a company. Security tokens, meanwhile, are backed by real assets such as equity, shares of a limited partnership company, or commodities. These are used to pay dividends, share profits, pay interest or invest in other tokens or assets to generate profits for the token holders.

 

The power of the blockchain and digitization of securities and assets are seen to make a big impact on the fintech space in the long run. CEZA's new DATO rules will provide much needed change to the industry and encourage innovators to use new technologies responsibly.

 

"The safeguards built into CEZA's rules and system will lead to greater investor protection and transparency. The involvement of DA agents and experts bring in competent and neutral third parties into the process to help ensure issuers are truthful and accurate," Lambino explains.

 

Lambino said CEZA has built an ecosystem of OVCEs where tokens of issuers can be listed. CEZA and ABACA have also approved wallet providers and insured digital asset custodians to ensure proper storage and governance of investor proceeds.

 

ABACA, as a newly-appointed SRO, will help the government regulate cryptocurrency companies by effectively converting industry players into enforcers. The SRO is enforcing a code of conduct among the members and reports to CEZA any breach, violations, or any matters relating to OVCE rules and regulations.

 

CEZA has emphasized that collaboration with locator fintech firms and industry players will help the government gain insights and keep up to date with innovations on the emerging markets. The economic zone authority is using research on national and international business standards to efficiently regulate the industries and licensees under its jurisdiction.

 

"The SRO model allows industry players to police its own ranks, while also promoting and protecting the interests of cryptocurrency investors. The rules will remain stringent in assessing the ethics and integrity of companies eyeing to launch Digital Asset Token Offerings" says Ma. Juanita Cueto, Chairperson of ABACA.

 

"CEZA is moving forward with its goal to develop the economic zone as the center of fintech firms in Southeast and Northeast Asia. The economic zone authority has already approved and issued provisional principal offshore virtual currency exchange licenses to 19 companies engaged in the blockchain ecosystem industries.

 

About ABACA

 

ABACA is a self-regulatory organization (SRO) granted under the authority of the CEZA. ABACA self-regulates the code of ethics and compliance with best practices and industry standards for the financial technology firms operating within, or in affiliation with CEZA and ABACA members.

 

Source http://www.media-outreach.com/release.php/View/7913#Contact