Philippine SEC Sounds Alarm on Unregistered Crypto Platforms Amid Rising Financial Crime Threats

Suspicious digital wallets and high-risk cryptocurrency trades are once again under intense scrutiny, with the Philippine Securities and Exchange Commission (SEC) issuing an urgent advisory that puts the spotlight on a surge of unregistered crypto platforms targeting Filipino investors. Unlike prior general reminders, this latest warning is a direct and forceful response to growing concerns over financial crime risks driven by gaps in crypto regulation and oversight.

At the core of the SEC’s announcement is a clear mandate: any entity offering or promoting investment and trading opportunities to Philippine residents must register with the SEC under Republic Act No. 8799, known as the Securities Regulation Code (SRC). Equally critical is compliance with anti-money laundering (AML) provisions under Republic Act No. 9160, the Anti-Money Laundering Act (AMLA), including the 2021 amendments that formally designate virtual asset service providers (VASPs) as “covered persons.” Together, these legal frameworks underpin the country’s efforts to respond to emerging threats in the digital finance landscape.

Despite these regulations, many crypto platforms operating outside Philippine jurisdiction continue to market aggressively to local users without any formal registration or compliance infrastructure. These platforms—often based offshore—frequently bypass essential safeguards, offering anonymity, lacking proper customer due diligence, and failing to screen for suspicious activity. As the SEC’s August 2025 advisory outlines, dozens of such unregistered platforms have been identified, underlining that this is not a speculative or isolated issue.

According to Philippine law enforcement and regulatory bodies, there has been a marked increase in the misuse of crypto channels for money laundering activities. Techniques include local cash-ins through agents, peer-to-peer trades with unverifiable parties, and swift transfers to overseas exchanges. Without the required registration and reporting, these activities evade scrutiny, and investors are left with no legal protections in cases of fraud or loss.

The SEC’s message is clear: “Unregistered platforms that facilitate trading or investment in crypto without complying with registration and AML obligations are now squarely in the regulator’s crosshairs.” This isn’t a bureaucratic formality—it is a deliberate move to curb a rapidly expanding threat to financial integrity and consumer safety.

The risk of money laundering via unregulated exchanges has emerged as a critical weakness in the Philippines’ AML regime. These platforms operate outside of domestic legal structures, giving criminal actors a pathway to disguise, transfer, and cash out illicit funds with little resistance. The Anti-Money Laundering Council (AMLC) has reported repeated instances where unregistered VASPs were instrumental in structuring transactions across multiple wallets and jurisdictions, using methods such as “smurfing” and mixing services to obscure the origin of funds.

In one widely reported fraud case, Filipino investors were lured into placing funds with unregistered trading apps. Those funds were then funneled through anonymous wallets and ultimately liquidated via offshore exchanges—entirely beyond the reach of Philippine law enforcement. These schemes, as the AMLC notes, capitalize on minimal onboarding requirements and nonexistent reporting obligations, bypassing both SEC authority and AMLC oversight mechanisms.

Even when suspicious activity is flagged, the lack of legal cooperation and jurisdictional control over these offshore entities complicates any effort to freeze assets or pursue enforcement. The ultimate result is a dangerous gap in the country’s financial defense system—one that criminals are increasingly exploiting.

To address this, Philippine regulators are doubling down on the country’s legal framework. The Securities Regulation Code mandates registration for any company dealing in securities, which includes crypto assets such as utility tokens and investment contracts. This ensures that such entities are subject to monitoring, compliance checks, and penalties. Violations can result in cease and desist orders, criminal charges, or administrative sanctions.

Meanwhile, the Anti-Money Laundering Act, reinforced by the 2021 amendments under Republic Act No. 11521, obligates VASPs to register with the Bangko Sentral ng Pilipinas (BSP) and fulfill AML duties including customer due diligence, record-keeping, and reporting of suspicious transactions. FATF-aligned measures, including the “Travel Rule,” now require detailed sender and recipient information to accompany all virtual asset transfers.

Nonetheless, enforcement remains a significant challenge, particularly when platforms claim to be merely “technology providers” and not investment facilitators. The SEC’s latest advisory explicitly dismisses such loopholes, warning that any platform offering crypto investment products to Philippine users must comply with domestic law—regardless of where it is physically based.

To strengthen oversight, the SEC has published a detailed list of unregistered crypto entities, giving both consumers and financial institutions a tool for risk screening. This strategy mirrors international best practices promoted by the Financial Action Task Force (FATF), which encourages public identification of high-risk actors as a frontline defense against abuse.

Financial institutions in the Philippines are now on alert. Under BSP Circular No. 1108 and AMLA provisions, banks, fintechs, payment firms, and remittance companies must vet transactions for links to unregistered platforms, apply enhanced due diligence, and report red flags to the AMLC. Compliance systems must be updated to incorporate the SEC’s blacklist and to detect irregular crypto trading patterns, large transfers, and suspicious account behavior.

For individual users, the stakes are even higher. Those engaging with unregistered platforms risk more than just losing their funds—they may face legal consequences or become entangled in criminal investigations without knowing that their transactions have been flagged. Unlike regulated institutions, these offshore exchanges do not offer investor protection, fraud recourse, or operational transparency.

Financial firms are being urged to boost employee training, refine internal controls, and keep pace with emerging crypto typologies. The SEC’s move is not a suggestion—it is a clear statement that adherence to AML laws and platform registration is no longer negotiable for anyone involved in the digital asset space.

This advisory also lands at a pivotal moment. The FATF continues to monitor the Philippines’ AML/CFT regime closely, and virtual asset risk remains a recurring concern. Failure to demonstrate enforcement of crypto-related regulations could damage the country’s reputation with foreign investors and financial counterparts.

The SEC’s firm position sets an example for neighboring Southeast Asian nations facing similar challenges. As regional crypto adoption accelerates, coordinated action, early identification of threats, and aggressive public communication are becoming essential components of an effective AML/CFT response.

The Philippines’ stand on unregistered crypto platforms marks a major escalation in the battle against financial crime in the digital economy. The SEC’s August 2025 advisory underscores that regulation, compliance, and transparency must be the cornerstones of any sustainable crypto ecosystem. For institutions, regulators, and the investing public, the directive is unambiguous: in the age of digital finance, cutting corners is not just risky—it is no longer tolerated.

By fLEXI tEAM