Ethereum

Bangko Sentral ng Pilipinas warns the public about unregistered VASPs

The central bank Philippines also known as Bangko Sentral ng Pilipinas (Bangko Sentral) released a warning Urging citizens to stay away from unregulated Virtual Asset Service Providers (VASPs).

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As stated in the published announcement, Bangkou Central emphasized that virtual assets are a risky asset class with high volatility which in turn will lead to huge financial losses from price volatility.

Based on a statement issued by Bangko Sentral ng Pilipinas, the public is urged to desist from entering into business with VASPs either unregistered or residing abroad. Already, there is a significant risk of price volatility in the cryptocurrency ecosystem, and in addition, VASPs located outside the country’s region may present “an additional challenge regarding enforcement of asylum mechanisms, consumer protection and compensation for local clients, among other things.”

To be clear, the BSP explained that the government and registered VASPs certainly do not guarantee protection against money losses as a result of fluctuations and volatility.

However, many frauds and violations committed in the ecosystem have been successful using unregistered VASPs. VASP clients are advised to exercise due diligence and ensure that all risks are taken into account before finalizing their investment.

In turn, potential VASP clients can Emphasizes The status of any crypto company they intend to trade with is registered in the list that has been provided by the financial regulator.

Ironically, this precautionary warning comes at a time when Bangko Sentral ng Pilipinas will not issue any license or approval to crypto companies and other digital asset providers.

A week ago, the Financial Supervisory Authority announced that it will not do so to treat Any application for a VASP license for the next three years starting September 1st. Therefore, any VASP that wishes to make adjustments before its users start opting out will not be able to do so until 2025.

Although it is still a provisional decision subject to reassessment of market development. As an exception, crypto entities wishing to expand their offering and act as a VASP with the Supervision/Assessment Framework (SAFr) will still be allowed to apply for a license.

Image source: shutterstock

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