Philippines Blocks Major Crypto Platforms: A Regulatory Clampdown

Recent actions by Philippine regulators have led to significant disruptions in access to major cryptocurrency exchanges within the country. This crackdown is part of a broader initiative to enforce local registration and licensing requirements for virtual asset services, affecting both local and international platforms.

Key Takeaways

Philippine internet service providers have blocked access to 50 cryptocurrency platforms, including Coinbase and Gemini.
The National Telecommunications Commission (NTC) executed these blocks following an order from the Bangko Sentral ng Pilipinas.
Regulators aim to protect consumers and ensure compliance with local financial regulations.
Users of unlicensed platforms face challenges in accessing their funds with no legal recourse.

Philippines Blocks Major Crypto Platforms: A Regulatory Clampdown

Internet Access Disrupted for Crypto Traders

This week, internet users in the Philippines found themselves cut off from prominent global cryptocurrency exchanges as local internet service providers (ISPs) complied with regulatory mandates. The list of impacted exchanges includes Coinbase and Gemini, which are among the largest crypto platforms based in the U.S. Reports from users across various Philippine ISPs confirmed that they could no longer access these services.

Regulatory Actions and Background

The blocks were imposed following a decree from the National Telecommunications Commission, which directed ISPs to restrict access to 50 online trading platforms identified by the Bangko Sentral ng Pilipinas (BSP) as operating without proper authorization. The NTC clarified that this order was put into effect after an official request from the central bank aimed at disabling websites and applications of unlicensed virtual asset service providers.

Grounded in the updated financial regulations described in BSP Circular No. 1206, this action underscores the necessity for virtual asset providers to adhere to local laws. The framework prioritizes consumer protection, financial stability, and the BSP's authority to oversee money services and digital asset entities according to the New Central Bank Act.

By restricting access to noncompliant platforms, regulators aim to safeguard the public from financial uncertainties associated with unregistered services.

Impact on Users and Traders

While a complete list of blocked platforms was not disclosed, the regulatory body acknowledged the heightened public interest surrounding the unavailability of large international exchanges, indicating that more platforms could face similar enforcement actions in the future.

For investors, this abrupt change has resulted in immediate challenges, as many were caught off guard. Account cancellations, order disruptions, and the inability to withdraw funds from frozen accounts have become prevalent issues. Local traders have reported sudden asset liquidity freezes, prompting hurried attempts to transfer assets abroad.

Regulators have asserted that funds lost, stolen, or inaccessible due to these enforcement measures bear no legal remedies for users of unregistered platforms.

Moving Toward Licensed Crypto Transactions

In addition to short-term interruptions, this crackdown reflects a significant shift in the regulatory landscape governing cryptocurrency activities. The Securities and Exchange Commission (SEC) has emphasized the need for licensed platforms to adhere to stringent regulations related to fund management, disclosure practices, cybersecurity measures, and anti-money laundering protocols.

Authorities believe directing users toward legitimate, registered platforms will significantly reduce their risk of exposure to fraudulent activities, market manipulation, and illegal financial operations.

This recent enforcement effort is part of a series of regulatory actions taken over the past two years. At the end of 2023, the Philippines initiated a 90-day grace period for Binance to comply with local regulations, warning that failure to do so would lead to the closure of the exchange by ISPs by March 2024 and its subsequent removal from major application stores.

Additionally, at least ten unregistered platforms, including OKX, Bybit, and Kraken, have received warnings from the SEC for unauthorized operations, raising concerns over investor safety and national security.

As regulations evolve, authorities are actively working on formalizing new regulations for the sector. In December 2024, the SEC published a draft rule for Crypto-Assets Service Providers and invited public consultation on areas including licensing, disclosure standards, capital adequacy, and cybersecurity protocols.

Moreover, the SEC has introduced a regulatory sandbox allowing registered firms to test innovative crypto products under supervision.

Despite the ongoing crackdown on unlicensed platforms, regulated crypto activities continue to expand. The PDAX local exchange has launched stablecoin payroll services for remote workers, and the licensed crypto digital bank GoTyme has rolled out in-app crypto services.