The Cagayan Economic Zone Authority (CEZA) has frozen all crypto currency exchange licensees until mid-2020 after an alleged investment scam involving a Chinese company.
CEZA said the suspension would remain in place until a new facility in the zone is completed and can house all the firms in one place, allowing easier oversight. Currently, license holders are being permitted to operate in metro Manila.
“We decided to prohibit not only GMQ but all registered OVCEs from operating until the fintech hub building in CEZA is ready to accommodate these companies in mid-2020,” CEZA spokesman Mike Gerald David was cited as saying. “We see this as a preventive move to deter other fintech companies from doing fraudulent activities. Once they are all gathered in a single building, it will be easier for us to monitor their activities.”
On Monday, CEZA Secretary Raul Lambino ordered a thorough investigation into a scam allegedly operated by Golden Millennial Quickpay Inc, whose license was suspended last week.
CEZA said it has issued directives to all of its licensees for complete reports of legal, regulatory, and ethical compliance practices and standards—specifically to those operating offshore virtual currency exchanges. In this context, offshore virtual currency exchanges are those which are registered in a jurisdiction other than the Philippines that do not transact with any Filipino citizen or any person located in the Philippines.
“These reports are under review at this time and will form the basis for further internal investigation should any deficiencies be uncovered. Any and all violations of legal, regulatory, or ethical compliance will be subject to all applicable sanctions under CEZA rules and Philippine law,” CEZA said.
CEZA was formerly the master licensor for online gaming in the Philippines, although it saw most of its licensees migrate to the Philippine Amusement and Gaming Corp once the land-based regulator began issuing offshore gaming licenses.
The zone has since been working on reinventing itself as a fintech and crypto hub.
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