Cryptocompanies need to determine the right place of incorporation to directly start working on the market. Most co-founders of such legal entities choose island countries, as most often their leadership is welcoming to companies. Such regions do welcome foreign investment, and many people think in particular about setting up a crypto company on Philippines for sale or exchange crypto. For quite some time, the local Central Bank has been actively helping companies to obtain the relevant permits. However, since last year, all the plans of the companies have been largely disrupted. Therefore, the co-founders of such legal entities have a question whether it is possible to create a company in this direction and work legally. We have a unique offer for you in this regard.
What happened last year?
According to the regulation of the Philippine Central Bank, companies working with digital assets must suspend their activities for 3 years. Specifically, the issuance of a Virtual assert service provider on Philippines for sale, exchange, and storage of cryptocurrency is suspended for such entities.
According to the management of the Central Bank of the Philippines, this approach will help to achieve a certain balance of protection of investor funds and promotion of innovative projects. The Central Bank’s management believes that virtual assets are being dumped for such services due to the vast number of financial services offered. In turn, this leads to risks to the functioning of the country’s financial system and its stability. Therefore, to date, the issuance of authorization documents has been suspended since September 2022 and will last until the same period in 2025.
How do companies that have already submitted applications operate?
Before the suspension of licenses, some organizations had time to apply for permits. Such applications will not be processed. However, there is an exception for companies that have managed to pass the second stage of the procedure. The applications of these corporations will be processed and a decision on the issuance of a license may be made.
Nevertheless, the demand for this format of services only continues to increase. This is causing a bit of dissonance, and service providers do not understand whether it makes sense to apply for the appropriate license.
Comments from country leaders and analysts
The head of the Philippine Central Bank so far only states that the region needs to modify its approach to licensing companies seeking to operate in the VASP industry. However, he does not reveal more details about the process.
Local analysts say the main reasons for the freeze on new license applications include:
- hacking of Axie Infinity as one of the largest players on the market;
- problems at other major giants (Celsius and Voyager being the most prominent);
- the importance of revising the rules and requirements for applicants; prioritizing the work of companies that have long entered this market.
Financial analysts believe that the introduction of the new approach will help shift the focus to assessing the performance of current VASP organizations. This will help to properly reorganize the risk management systems. Also, such a step will help to properly study their impact on the country’s financial sector and help to determine the goals of the company’s entry into this market.
Currently, there are 19 companies registered in the country that can provide VASP services. At the same time, not all major global players have been able to obtain such a license. You can find large companies on the digital asset exchange, but, for example, the Binance platform has not yet received such an opportunity. And given the stoppage of license issuance, it is not a fact that shortly it will be able to enter the Philippine market and operate here.
Is it possible to obtain a license to bypass the Central Bank’s ban?
This question is of interest to a large number of companies and for its resolution it is worth getting advice from professionals. Our employees will help to resolve any issue in the field of obtaining a VASP license and providing relevant services.
Each of our employees has worked with Philippine regulators on numerous occasions. This means that we know their requirements, principles, and weaknesses. Accordingly, we will find a way to help organizations that have had time to apply but have minor inconsistencies with the requirements of the regulators.
Also, we will be able to help prepare organizations that have not yet started working on the application. As a result, as soon as the ban is lifted, you will be able to quickly complete registration and submit a package of documents for consideration.