Five Things You Need To Know Before Starting A Crypto-Exchange Business In The Philippines
- You must have the BSP’s approval before you can register your company with the SEC.
For most companies, the usual requirement before legitimately operating a business is to simply secure a license with the Securities and Exchange Commission. However, the same route is not true for a crypto-exchange business, as it must first secure an endorsement from the Bangko Sentral ng Pilipinas.To get the BSP’s nod of approval (for SEC registration purposes), the company must pass the rigorous preliminary screening process for determining its eligibility for registration.At this point, the company must prepare, among others, a business plan detailing the company’s purpose, organizational structure, products/services to be offered, target market/network, operational workflow and capital requirements. The business plan must be clear enough to give BSP an idea of what you really intend to do. If your operations will include online transactions, you should also be ready to present your platform.
If you pass the preliminary screening, a letter of no objection will be issued in your favor, and you can proceed with your SEC application for registration.
- You must secure a BSP license before operating your crypto-exchange business.
Once you’re registered with the SEC, should you already start the crypto-exchange operations? Not yet.You must go back to BSP and comply with the second stage requirements, which are listed under the BSP Memorandum No. M-2017- 014. Basically, you will have to submit the SEC incorporation documents and business permit of the company. The company’s officers and directors must submit their personal data sheets and undertakings to comply with AML rules.
- You must meet the capitalization requirements.
The capitalization requirement may range from less than PHP10 million for small-scale operators to at least PHP50 million for large-scale operators. If your business includes e-money issuance, the requirement is PHP100 million.
- You must build a secure IT infrastructure.
The use of digital technology is faced with challenges, such as more sophisticated cyber-attack methods. Pursuant to BSP Circular No. 944, Series of 2017, a virtual currency exchange shall put in place adequate risk management and security control mechanisms to address, manage and mitigate technology risks associated with virtual currencies. An effective cyber security program should be established by a virtual currency exchange that provides wallet services. For simple virtual currency operations, installing up-to-date anti-malware solutions, conducting periodic back- ups and being aware of emerging risks and cyber-attacks may suffice.No matter the complexity of your operations, at the end of the day, the integrity and security of your platform must be maintained. Thus, you should seek competent IT professionals or service providers that will help in protecting your clients’ funds and data, and likewise your business.
- You must comply with anti-money laundering laws.
A virtual currency exchange must register with the Anti-Money Laundering Council within 30 days from the actual date of commencement of operations. Its principal directors, officers, or responsible personnel should attend a seminar on anti-money laundering and terrorist financing, and training for staff should be provided to enable them to detect illegal transactions and/or prevent the exchange from being used for fraudulent purposes. Policies must be implemented to ensure compliance with anti- money laundering regulations. The board of directors should likewise appoint a Compliance Officer who shall be responsible for overseeing the implementation of relevant policies and reporting covered and suspicious transactions.
And there you have it. If you are thinking of starting a crypto-exchange business in the Philippines, take careful note of the above. The world is changing fast, and it pays to keep abreast of all the latest rules and regulations. For consultation and assistance in setting up your business, email me at email@example.com.
Attorney Stephanie Anne V. Tible. July 11 2019
Photo by Clifford Photography @ Unsplash
The Perks of Converting Manually-Issued Land Titles to E-Titles.
A land title or a certificate of title serves as best evidence of one’s ownership over a
piece of land. Among other things, it provides and confirms a property’s location, its
metes and bounds (boundary lines), size or area, as well as the name of its legitimate
owner. Ordinarily, a land title is made of paper, and thus susceptible to being forged,
lost, misplaced or destroyed by wear and tear, fire or similar natural and man-made
disasters. Needless to say, it is at times troublesome for an owner to preserve and
maintain such a document.
Upgrading to e-Titles
It was back in 2008 when the Land Registration Authority (LRA) launched the Land
Titling Computerization Project, part of which allowed manually-issued, paper-made
land titles to be converted into e-titles under the e-Titling Conversion Project.
As a result, the original titles in the Registry of Deeds’ Vault are now digitized and
stored in the computer database, while the owners’ duplicate copies can now be converted to e-titles. The conversion involves scanning and digitization of manually-
issued land titles (with red borders), the relevant title information, and the storage of
these records in secure databases. Certainly this is a welcome development, since
apart from avoiding the problems with paper-based land titles, it also ensures that the
title records of the Registries of Deeds are easily accessible and that copies are
electronically preserved and backed-up securely for future reference.
On July 31, 2018, owners of land titles received a slight shock when the LRA published
a notice to the effect that September 30, 2018, was the deadline to scan/digitize
manually issued titles. This caused some concern and confusion until a subsequent
clarification made it known that the due date applied only to the LRA’s Registries of
Deeds, who were directed to retrieve, scan and digitize the remaining manually-issued
land titles which were not yet in the database. Owners of manually issued titles learned,
to their relief, that these remained valid and effective even if they had not been digitized
by the September 30 deadline. Indeed, it is only optional for owners to upgrade these
titles, though they are strongly encouraged to do so, pursuant to LRACircular 02-2016
as amended by LRACircular 02-2017.
Perks of e-Titles
- Better Protection from Various Forms of Real Estate Fraud and Scams
e-Titles are stored in a virtual Registry of Deed vault and can only be accessed and shared within the 154 LRA extension office kiosks. This is intended to minimize the number of court cases and disputes involving fake and spurious land titles (copies that do not come from legitimate sources). Moreover, existing annotations on the paper title are carried over to the e-title, including pending court cases, alerting would-be buyers or those who have claims or an interest in the land.
- Enhanced Real Estate Transactions
With the creation of an e-titles database, procurement and verification of Certified True Copies of Land Titles, as well as retrieving information regarding the history of ownership of a property, becomes a lot easier for both sellers and, especially, purchasers of real estate, who need to determine the status of a property as well as the possible existence of other claimants. This dispenses with the old methods that would often take days, weeks or months of legwork and follow-up.
- Faster Real Estate Mortgage Processing
For financing or home loan purposes, banks and financial institutions hosting LRA extension office kiosks require much less time – from a matter of days, previously, to a matter of minutes, now – to verify the authenticity of a land title offered as collateral. More importantly, land title owners need not visit the Registry of Deeds where their titles were registered and can instead avail themselves of the “anywhere-to-anywhere” service (A2A) whereby they can request certified true copies of the e-titles in the database from any Registry of Deeds with online services.
- Simplified Processing in Replacing Lost or Destroyed Titles
e-Titles face no risk of damage or loss. Even if a Registry of Deeds office were to be gutted by fire, records are safely preserved in the database.
- Efficient Government Processes
Digitized titles are less time-consuming and reduce bureaucratic red tape. This creates the perception of a government progressing from slow deliverer to a more efficient service provider. In turn, this encourages property owners to be proactive about managing their most prized possession.
Go and Covert to e-Titles!
With the convenience and protection offered by e-titles, there is no doubt that converting
to these should be the trend for every title owner. To avail themselves of the service,
property owners simply need to bring the owner’s duplicate title and other required
documents to the Registry of Deeds or the nearest satellite office. The LRA personnel
will match the duplicate copy to the original to validate authenticity. Once validated, the
conversion process of the manual title to e-title will commence. It will only take a few
days and the owner’s duplicate e-title will be ready for pick-up – all for the price of a
Atty. Bayani B. Brillante, Jr. July 10, 2019.
Picture by Jonathon Young at Unsplash