The central bank of the Philippines, the main regulator of the country’s cryptocurrency sector, has warned investors not to engage with foreign and unregistered cryptocurrency service providers. “They may present additional challenges to enforcing legal remedies and consumer protection and compensation mechanisms for local customers, among others,” the regulator said.
Crypto Warnings from the Central Bank of the Philippines
The Philippine central bank, Bangko Sentral ng Pilipinas (BSP), issued a public warning on Tuesday regarding foreign and unregistered crypto service providers. In the Philippines, the central bank is the main regulator of the cryptocurrency sector.
The ad says:
Bangko Sentral ng Pilipinas (Bangko Sentral) strongly urges the public not to deal with Virtual Asset Service Providers (VASPs) that are not registered or domiciled abroad.
The central bank’s website shows that as of June, 19 VASPs have been registered.
In addition to the risk of price volatility associated with virtual assets (VAs), the central bank explained that VASPs that are based abroad “may present additional challenges in enforcing legal remedies and protection and redress mechanisms.” of the consumer for local clients, among others”.
The Bangko Sentral emphasized:
VA transactions are generally considered high-risk activities that can result in huge financial losses due to price swings.
In addition, the central bank warned that the government does not guarantee protection against financial losses arising from fluctuations in the price of cryptocurrencies. “The public should exercise caution, perform their own due diligence, and always be aware of the risks before engaging in VA-related activities,” the regulator emphasized.
Bangko Sentral ng Pilipinas has urged the public to immediately report illegal activities facilitated through cryptocurrencies and/or cryptocurrency service providers to the central bank.
Last week, the central bank announced that it will stop accepting new VASP license applications for three years, starting on September 1. The regulator explained that it “aims to strike a balance between promoting innovation in the financial sector and ensuring that the associated risks remain within manageable levels.”
What do you think of the Philippine central bank’s warnings? Let us know in the comments section.
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