Infrawatch, a public policy think tank, welcomed the Securities and Exchange Commission’s (SEC) new sandbox program for crypto regulation but called on the agency to step up enforcement against unregistered platforms operating in the Philippines.
The SEC recently launched the Strategic Surveillance and Enforcement Sandbox (StratBox), a program that allows licensed Crypto Asset Service Providers (CASPs) to test digital products and services in a controlled setting. The sandbox opened for applications in May.
“The sandbox model supports innovation but only for regulated and licensed entities,” said Terry Ridon, convenor of Infrawatch. “The use of crypto for illicit activities remains rampant particularly on unregulated and unlicensed firms, and the government should crackdown on firms operating in the Philippine market.”
Ridon said the StratBox is a step forward in helping the SEC better understand risks associated with digital assets while giving licensed firms space to innovate. However, he warned that these efforts may not be effective if illegal exchanges are still able to operate freely.
“If the SEC seeks strict compliance from licensed cryptocurrency exchanges, it should undertake stronger measures to crack down on unlicensed exchanges operating in the Philippines, particularly through advisories warning the public against investing in these firms,” Ridon said.
He pointed out that unregistered platforms are often used in online scams, money laundering, and other illegal activities that continue to target Filipino investors.
Ridon also urged the SEC to work with the National Telecommunications Commission (NTC) to block access to unregistered exchanges, citing the earlier decision to restrict Binance for operating without proper registration.
“Compliant players are subject to strict regulatory requirements, while unlicensed entities often operate with fewer restrictions, creating a distorted environment where non-compliance appears more profitable,” Ridon said. “This sends the wrong signal to the market and undermines confidence in the regulatory framework.”
He added that support for the digital asset sector should come with clear rules on transparency, accountability, and law enforcement.
“An emerging crypto environment should be regulated by the government to protect the public interest and investor funds while allowing innovation to thrive,” Ridon said. “This means crypto entities working with the government through a regulatory framework that gives importance to transparency and accountability while allowing entities to create new products and services to fill various gaps in the market.”
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