Philippines Issues Crypto Industry Guidelines to Guard Against Money Laundering

The Philippine central bank Bangko Sentral ng Pilipinas (BSP) has published new guidelines for Virtual Asset Service Providers (VASPs) to prevent money laundering.

The BSP said in a January 25 document (see below) that under the framework, VASPs must apply for a license, a “Certificate of Authority”, to operate as a money-sending company.

They also need to adapt to existing central bank regulations for financial services providers in areas such as liquidity and operational risk, IT risk, internal controls, consumer protection and anti-money laundering.

VASPs now require a minimum capital requirement of 50 million Philippine pesos (just over $ 1 million) if they are providing custody services, or a lesser of 10 million pesos ($ 208,000) if not.

The central bank governor’s office said in a policy statement that it “supports an environment that encourages financial innovation while ensuring the integrity and stability of the financial system”.

While virtual assets “have the potential to revolutionize the provision of financial services,” all the benefits should be considered alongside the risks of using it in money laundering, it said.

VASPs are also responsible for performing their own customer due diligence and are required to treat cryptocurrency transactions as cross-border transfers, with participant data retained for these over 50,000 pesos ($ 1,000 USD).

Suspicious activity or individual transactions worth 50,000 pesos ($ 10,000) require additional due diligence and withdrawal restrictions, according to the BSP.

The guidelines are based on international standards for regulators issued by the Financial Action Task Force.

Read the following guidelines: