Certain provisions of the Securities and Exchange Commission’s draft “Crypto Asset Service Provider Rules” could affect grants from global blockchain companies to local projects, warns crypto lawyer Atty. Rafael Padilla.
What is the meaning? If implemented, the regulations could pose challenges for local Web3 projects that rely on grants from international organizations to support community events and initiatives. (Read more: Community should welcome feedback on SEC draft cryptoasset rules)
- The crypto lawyer strongly encourages the community to submit comments to the SEC to help shape its upcoming rules for crypto-affirmation service providers.
- The SEC can be emailed to [email protected]
- Draft Cryptographic Rules (Summary and Full Text)
Key details:
- He January 8 episode of the BitPinas webcast discussed the implications of the SEC’s proposed “Cryptoasset Service Provider Rules” with crypto attorney Rafael Padilla, introduced by BitPinas Editor-in-Chief Michael Mislos.
- During the webcast Q&A session, Atty. Padilla addressed the potential impact of the proposed draft on grants received by local web3 communities from international organizations.
- These grants often sponsor events and other community initiatives.
- The question concerned the regulations specified within the marketing and promotions section of the project.
Review: Marketing and Promotions Section of Draft Rules:
- Any form of offer, incentive, endorsement, solicitation, promotion or advertising may qualify as Marketing regardless of the medium or channel through which it is made, and which may include, but is not limited to, the following:
- Communications, publications, dissemination of any form of data, information or content that is promotional, influenced and/or sponsored material;
- Social media posts, blogs, comments, unwritten communications, banners, billboards, videos, podcasts, recordings or live broadcasts;
- Events held in the Philippines that may facilitate customer acquisition or encourage the use of any product and/or service related to any CASP Activity and/or the acquisition or disposal of any Crypto Asset;
- Advertisements, sponsored editorials, paid or earned media and all forms of advertising content or materials, including brands and products;
- “Airdrops” or the issuance, delivery or transfer of a Cryptoasset; and
- Educational content including articles, talks, presentations, debates and tutorials, whether online, offline, audio and/or visual.
- No person shall communicate, offer, induce, solicit, promote, advertise or deliver crypto asset services unless registered as a CASP or an authorized third party service provider.
- All forms of marketing or promotion of cryptoassets or services to the public must be carried out in simple, clear and concise language, which accurately and sufficiently discloses the product or service provided, as well as the associated risks, in a manner that is not misleading. in both substance and presentation.
- A CASP will be liable for the acts or omissions of its directors, trustees, officers, employees or agents in the marketing of cryptoassets or cryptoasset services. The CASP will be jointly and severally liable to its authorized third-party service providers for acts or omissions in the marketing of products or services.
- A CASP shall disclose and submit to the Commission a list of its authorized third-party service providers that it has engaged for marketing and promotional activities. Entries on the list will include the name of the third party supplier, the mode or method of marketing and promotion, verified contact details and other information that may be required by the commission.
The Commission will have the authority to require its respective supervised CASPs and its third party agents/service providers to submit reports or documents as necessary.
Key takeaways from the debate:
- The Philippines may have difficulty gaining support from global organizations for local web3 programs.
- Lawyer. Padilla urges the community and industry to speak up to ensure the SEC hears their concerns about the proposed policy.
- It emphasizes that the SEC should regulate only securities, securities-related transactions, and broker-dealers, not non-securities-related Web3 projects.
- The proposed rules, if approved, could discourage funding and support for local Web3 projects and developers.
- Padilla encourages action by submitting comments to the SEC by January 18.
Key quote:
“I’ve said it several times: the SEC should only regulate securities, securities-related transactions, and securities dealers. If major Web3 projects aren’t involved in anything securities related, why should they be covered by these rules? Again, these proposed rules, if approved, will cast a wide net that will include these projects and, as a result, could discourage funding or support for local projects and developers. But act.”
Lawyer. Rafael Padilla, crypto lawyer
Besides: He added that he plans to submit his comment focusing on the need to limit the scope of the proposed rules to cover only securities-related crypto assets.
“I intend to write my comment focusing solely on this topic. My only concern, and I hope the SEC understands, is the need to review the scope of these rules. They should reduce it to cover only cryptoassets that are securities, securities-related transactions and cryptoasset securities intermediaries.”
Lawyer. Rafael Padilla, crypto lawyer
Remove: The Philippine SEC released draft rules for crypto asset service providers to regulate the growing cryptocurrency industry.
- The draft rules detail licensing, compliance, marketing, cybersecurity, anti-market manipulation and sanctions.
Respectively: BitPinas published two articles detailing the draft in summary and full context.
Further: After the news was published, the SEC’s draft rules for CASPs received mixed reactions from the local web3 community. Some members praised the potential for greater transparency and consumer protection, while others found the rules restrictive, burdensome and stifling innovation.
worth reading: During the same webcast, Atty. Padilla also urged the community to participate in the public consultation process to ensure that the regulatory landscape in the Philippines fosters innovation and growth while protecting the interests of all stakeholders.
This article is posted on BitPinas: Crypto Lawyer: SEC Draft Rules May Affect Local Blockchain Grants
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