- The Philippines SEC said it will regulate cloud mining contracts like securities.
- Any cloud mining agent who fails to register would be penalized up to 21 years imprisonment.
Philippine: The Philippines Securities and Exchange Commission (SEC), which acts as the financial securities watchdog for the country, announced that it sees crypto cloud mining contracts as securities and has would regulate cloud mining contracts within the country under the standing securities laws.
The Philippines SEC issued a statement on Tuesday 10th June, where the agency stated that cryptocurrency cloud mining contracts should be classed as securities. This is because when the Howey test was applied to the contract, the process was revealed that cloud mining contracts involve investing money with the expectation of making profits.
In cloud mining, investors do not need to set up the actual mining gears to mine digital currency, but rather take a share in the mining capacity of a remote facility via a contract.
The decision to regulate crypto cloud mining contracts as securities arose after the Philippines financial watchdog noticed that individuals and companies involved in cloud mining are advertising and soliciting investors within Philippine, most of which are now treated as an unregistered issuance of securities by the SEC.
To this end, the financial watchdog stated that anybody, individuals or groups, which include salesmen, promoters, brokers, or recruiters, found offering cloud mining contracts to anybody or individuals within Philippine without registering with the Philippines SEC may be prosecuted and punished with a sentence of up to 21years imprisonment.
This action follows Philippines’ tough stance against cryptocurrency related activities. Though it was reported that the Philippines SEC has been formulating laws to regulate ICOs, the agency has also improved upon its efforts to scrutinize all crypto-related projects that fall under the jurisdiction of current securities rules.
Prior to this move, there was a report that Philippines lawmakers had also been contributing to proposals for stricter penalties on any crypto-related crime.
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