In August 2025, the Philippines—SEC issued a public advisory targeting ten major offshore crypto exchanges—OKX, Bybit, KuCoin, Kraken, MEXC, Bitget, Phemex, CoinEx, BitMart, and Poloniex—for operating without licenses under the new Crypto Asset Service Provider (CASP) rules, effective July 2025.
These rules, outlined in SEC Memorandum Circulars No. 4 and No. 5, require all crypto platforms to register with the SEC, maintain a minimum capital of 100 million pesos (approximately $1.7 million), establish a local office, and comply with anti-money laundering (AML) regulations.
The SEC’s actions include blocking access to these platforms through internet service providers like PLDT and Smart, issuing cease-and-desist orders, and pursuing criminal complaints. Fines for violations can reach up to 10 million pesos per offense, with additional daily penalties of 10,000 pesos. The regulator has also collaborated with tech giants like Google and Meta to restrict unauthorized marketing. This follows a 2024 precedent where Binance was geo-blocked for similar reasons.
The crackdown aims to protect investors from risks like fraud, fund loss, and lack of legal recourse, while addressing national security concerns such as money laundering and terrorist financing, which could lead to the Philippines being “gray-listed” by international bodies like the Financial Action Task Force (FATF).
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The SEC has clarified that the list of flagged exchanges is not exhaustive, and other unregistered platforms could face similar actions. Filipino users are advised to verify a platform’s registration status with the SEC and avoid trading on unlicensed exchanges. This aligns with regional trends, as countries like Thailand and Indonesia have also tightened regulations on offshore crypto platforms.
The SEC’s actions aim to safeguard Filipino investors by enforcing licensing requirements, ensuring platforms meet capital, transparency, and AML standards. This reduces risks of fraud, hacks, or unrecoverable fund losses seen in cases like FTX or unregistered platforms. Blocking major exchanges like OKX, Bybit, and Binance restricts access to popular trading platforms, potentially pushing users to riskier, less regulated alternatives.
The CASP rules encourage the development of a regulated domestic crypto sector by requiring local offices and compliance. This could foster job creation and innovation but may deter smaller or foreign firms due to high costs (e.g., 100 million pesos capital requirement). The Philippines relies heavily on remittances (9.3% of GDP in 2024), and crypto has been a low-cost alternative for overseas Filipino workers (OFWs).
Restrictions may disrupt these flows, forcing users back to traditional, costlier channels like banks or remittance services. The crackdown aligns with international pressure to combat money laundering and terrorist financing, aiming to avoid FATF gray-listing, which could harm foreign investment and banking ties. However, overly strict measures might stifle the Philippines’ position as a crypto hub in Southeast Asia, where countries like Singapore balance regulation with innovation.
Blocking websites is not foolproof; users can bypass geo-restrictions via VPNs or decentralized platforms. This creates enforcement gaps, as seen in Binance’s continued use post-2024 ban. The SEC’s reliance on tech firms like Google and Meta for ad restrictions may also have limited impact on savvy users.
The SEC prioritizes consumer protection and national security, viewing unregistered exchanges as high-risk due to their lack of oversight. The focus is on formalizing the crypto market to align with global standards. Many Filipino crypto traders, especially retail investors and OFWs, value offshore exchanges for their low fees, high liquidity, and diverse offerings.
The ban creates friction, as compliant local platforms may offer fewer trading pairs or higher costs, pushing users toward unregulated alternatives or black-market trading. Licensed exchanges like Coins.ph and PDAX benefit from the ban, gaining a competitive edge. However, they may struggle to match the scale, liquidity, or advanced features (e.g., derivatives trading) of global giants like Binance or OKX.
Offshore exchanges face a tough choice: invest in costly compliance to enter the Philippine market or lose access to an estimated 11.8 million crypto users (10% of the population in 2025). Some may exit entirely, while others might explore loopholes. The strict rules signal a cautious approach to crypto, potentially stifling innovation in a country with high blockchain adoption (ranked 2nd globally in Chainalysis’ 2024 adoption index).
The Philippines’ actions reflect a global trend of tightening crypto regulations (e.g., India’s tax regime, Thailand’s offshore bans), but the divide between user needs and regulatory goals remains stark. Retail investors may face reduced options, while the government balances economic growth with risk mitigation. The long-term outcome depends on whether the SEC can foster a robust, compliant crypto ecosystem without alienating its tech-savvy population.