On-shore VASP in Philippines
Locally-incorporated VASP that operates under full local jurisdiction, holding all required licenses and registrations.
On-shore VASP is conditionally permitted in Philippines with a local entity, subject to AML obligations and high licensing burden.
Verdict Details
- Permitted
- conditional
- Local entity required
- Yes
- Licensing burden
- High
- Last updated
- 2026-07-13
AML Obligations
- VASP license holders must comply with the AMLA via AMLC oversight (ph.licensing.legislation-bsp-circular-1108, ph.licensing.regulator-amlc)
- Travel Rule obligation: VASPs must collect and share originator/beneficiary data (name, account/wallet number, physical address, unique ID, date/place of birth) for transactions at threshold of PHP 50,000 (ph.travel-rule.status, ph.travel-rule.adopted-yes-via-bsp-and)
- Sanctions screening against OFAC, UN, EU, and HMT lists before sending/receiving (ph.travel-rule.vasps-must-collect-and-share)
- Strict AML/KYC procedures mandatory under CASP rules (ph.licensing.strict-compliance-with-anti-money-laundering)
- CASPs must submit regular reports to the SEC and the AMLC with detailed documentation 30 days prior to any activity (ph.licensing.casps-must-submit-regular-reports)
- SEC fines up to ₱5 million (~US$88,000) per violation, plus daily penalties; BSP may impose license suspension/revocation and potential imprisonment (ph.travel-rule.sec-fines-up-to-5)
- Users self-report crypto gains/income; platforms do not auto-deduct taxes (ph.tax.platforms-like-coinsph-do-not)
Key Restrictions
- New VASP licenses are frozen indefinitely as of 2025, prioritizing existing licensees — no new entrants can obtain a license at present (ph.licensing.new-vasp-licenses-are-frozen)
- A moratorium on new VASP licenses was imposed in 2022 and only partially lifted in 2024; current status is frozen indefinitely (ph.licensing.vasp)
- Non-licensed operators face aggressive enforcement: geo-blocking, website/app blocks via NTC, cease-and-desist orders, criminal complaints (ph.enforcement.entity-binance-worlds-largest-crypto, ph.enforcement.entities-50-platforms-including-coinbase)
- Filipino ownership requirements may apply (60% Filipino ownership referenced) (ph.licensing.vasp)
- Issuers of stablecoins or certain crypto-assets may need to register as VASPs with BSP with PHP 100M minimum paid-up capital and maintain a local office under SEC CASP regime (ph.licensing.issuers-must-register-as-vasps)
Key Risks
- New VASP license freeze (indefinite as of 2025) means even qualified applicants cannot enter through the standard licensing path, forcing reliance on acquisition of existing licensees or sandbox pilots (ph.licensing.new-vasp-licenses-are-frozen)
- Aggressive enforcement against unlicensed operators sets a high bar for any compliance failure — Binance, OKX, Bybit, KuCoin, Kraken, Coinbase, Gemini, and ~50 other platforms have been blocked or publicly warned (ph.enforcement.entities-50-platforms-including-coinbase, ph.enforcement.entity-binance-worlds-largest-crypto)
- Regulatory overlap between BSP (Circular 1108) and SEC (CASP rules via Memorandum Circulars No. 4 & 5) creates dual oversight and potential jurisdictional friction (ph.licensing.oversight-splits-bsp-handles-custody, ph.licensing.crypto-asset-service-providers-casps)
- Tax treatment is not fully codified — no standalone CGT framework, no categorical BIR revenue issuance on crypto; self-reporting creates compliance gaps (ph.tax.no-standalone-cgt-framework-exists, ph.tax.regulatory-reference-bir-has-no)
- Upcoming Crypto-Asset Reporting Framework (CARF) by 2027-2028 will add automatic exchange of information obligations (ph.tax.upcoming-crypto-asset-reporting-framework-carf)
Evidence
This verdict synthesizes the following facts. Each fact links to its primary source(s).
SEC Philippines — Securities token oversight, warnings against unlicensed offerings
BSP Circular 1108 (2021) — VASP licensing framework
BSP Circular 944 (2017) — Virtual currency exchange registration
VASP: VASP License from BSP (Circular 1108/2021). PHP 50M (~$900K USD) minimum capitalization. 6-12 months. BSP imposed moratorium on new VASP licenses in 2022 to assess existing licensees; partially lifted 2024. Coins.ph and PDAX are major licensed operators. 60% Filipino ownership may apply.
CUSTODY: Included under VASP license; IT risk management requirements
EXCHANGE: VASP license — PHP 50M minimum capitalization. High crypto adoption driven by remittances and gaming/play-to-earn (Axie Infinity).
Oversight splits: BSP handles custody, exchanges, on/off-ramps, and payment roles via Circular 1108; Securities and Exchange Commission (SEC) governs issuance, marketing, and trading under its Crypto-Asset Service Provider (CASP) regime.
Crypto asset service providers (CASPs) must register with the Philippine Securities and Exchange Commission (SEC) and maintain a minimum capital of ₱100 million with physical incorporation in the Philippines
Strict compliance with anti-money laundering (AML) procedures is mandatory
CASPs must submit regular reports to the SEC and the AML Council with detailed documentation 30 days prior to any activity
New VASP licenses are frozen indefinitely as of 2025, prioritizing existing licensees.
Pilots operate in BSP's Regulatory Sandbox Framework, as with Coins.ph's PHPC approval on May 9, 2024 (exited sandbox June 2025).
Travel Rule adopted — threshold: PHP 50,000
Adopted: Yes, via BSP and SEC regulations governing VASPs, as part of efforts to exit the FATF Grey List; described as translating FATF recommendations into national law with a "clear and decisive stance."
VASPs must collect and share originator/beneficiary data (e.g., name, account/wallet number, physical address, unique ID, date/place of birth) for transactions, with sanctions screening against lists like OFAC, UN, EU, and HMT before sending/receiving; interoperability challenges noted globally, but no Philippines-specific protocols detailed.
SEC fines up to ₱5 million (~US$88,000) per violation, plus daily penalties; BSP may impose license suspension/revocation and potential imprisonment; aimed at preventing fraud.
No standalone CGT framework exists for crypto; gains from sales (crypto-to-fiat), crypto-to-crypto trades, or exchanges for goods are typically treated as ordinary income rather than capital gains.
Regulatory reference: BIR has no categorical revenue issuance on crypto as of recent discussions; gains must be "realized" (e.g., converted to fiat) to be taxable (https://www.bir.gov.ph/tax-info-details for general CGT on capital assets).
Platforms like Coins.ph do not auto-deduct taxes; users self-report (https://www.blockpit.io/integrations/coins-ph-taxes).
Upcoming: Crypto-Asset Reporting Framework (CARF) for automatic exchange of info by 2027-2028 to fight evasion; DOF commitment (https://www.dof.gov.ph/ph-to-implement-a-framework-on-crypto-assets-to-combat-cross-border-tax-evasion-and-illicit-financial-flows/).
Entity: Binance (world’s largest crypto exchange).
Entities: ~50 platforms including Coinbase, Gemini, and overlaps like OKX/Bybit/KuCoin (unlicensed virtual asset service providers/VASPs).
Entities: OKX, Bybit, KuCoin, Kraken, MEXC, Bitget, Phemex, CoinEx, BitMart, Poloniex (actively marketing to and serving Filipino users).
Penalty: Geo-blocking; users given 90 days to exit the platform, with website and app access restricted via coordination with telecom providers.
Verdict Attribution
- Source:
- AI-Generated · Unreviewed
- AI synthesized:
- 2026-07-13 (deepseek-chat)
- Last updated:
- 2026-07-13
- Confidence:
- medium
This verdict was produced by an AI model from the underlying facts. Confirm with counsel before relying on it for material decisions.
Conditional — a locally-incorporated on-shore VASP requires a BSP VASP license under Circular 1108 (PHP 50M minimum capitalization) and/or SEC CASP registration (PHP 100M minimum capital), but as of 2025 new VASP licenses are frozen indefinitely, effectively barring new entrants unless they acquire an existing licensee or enter via the BSP Regulatory Sandbox.
Questions this verdict aims to answer
- What license(s) are required to operate locally?
- What capital, governance, and reporting obligations apply?
- What is the application process and timeline?