Tech Law Reviewer

APRIL 17 Prepare for recitation: Topic-Virtual Assets and National Payments System
BSP circular 1108 and bitcoin mining
Access Devices Registration Act, Republic Act No. 8484

NAME: Justine Botilla

Access Devices Regulation Act, officially known as Republic Act No. 8484, is a law
in the Philippines that aims to regulate access to and use of devices such as credit
cards, debit cards, and other similar instruments. Here are some key sections of the
Act:
6.1 Access Devices (Section 3)
• Definition: The Act defines "access devices" as any card, plate, code, account
number, electronic serial number, personal identification number (PIN), or other
telecommunications service, equipment, or instrumentalities that can be used to
obtain money, goods, services, or any other thing of value.
6.2 Prohibited Acts (Section 9)
• Unauthorized Use: It is prohibited for any person to use an access device with
intent to defraud or to obtain anything of value without the consent of the
cardholder or account holder.
• Possession of Access Devices: Possession of an access device without the
consent of the cardholder or issuer is also considered a prohibited act.
• Production of Access Devices: Creating, making, or producing any access
device, whether it is real or counterfeit, without the cardholder's consent or the
issuer's authority is prohibited.
• Selling or Transferring Access Devices: Selling or transferring an access
device with knowledge that it is stolen or forged is against the law.
• Tampering with Access Devices: Altering, modifying, or tampering with the
components of an access device with intent to defraud is also a prohibited act.
6.3 Frustrated and Attempted Access Device Fraud (Section 12)

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 • Frustrated Crimes: The Act also covers "frustrated" access device fraud, which
means attempting but failing to commit any act defined under the Act due to
causes independent of the perpetrator's will.
• Attempted Crimes: Attempting to commit any act defined in the Act as an
offense is also covered, even if the attempt does not result in the actual use of
the access device or the completion of the fraud.
In summary, the Access Devices Regulation Act (Republic Act No. 8484) in the
Philippines aims to prevent unauthorized use, possession, production, sale, and
tampering of access devices such as credit cards, debit cards, and related instruments.
It establishes clear prohibitions and penalties for those who engage in fraudulent
activities involving these devices.

Title: Cruz vs. People

Case: G.R. No. 210266 Jun 7, 2017
In the case of Cruz v. People, a man convicted of possession and use of a counterfeit
credit card argues that the card should not have been admitted as evidence, but the
Supreme Court upholds his conviction, ruling that the trial court had the discretion to
allow its presentation and that the alleged inconsistencies in the testimonies were
minor.
Case Digest (G.R. No. 210266)
Facts:
• Anthony De Silva Cruz was convicted of possession and use of a counterfeit
credit card.
• The case revolves around the violation of Section 9 (a) and (e) of the Access
Device Regulation Act.
• On April 18, 2006, Cruz attempted to purchase two bottles of perfume and a pair
of Ferragamo shoes using a Citibank Visa credit card.
• The cashiers at Duty Free Philippines noticed inconsistencies with the credit card
and called Citibank to verify it.
• It was discovered that the credit card was counterfeit.
• Cruz was apprehended by security officers and turned over to the police.
• Cruz was charged with violation of Section 9 (a) and (e) of the Access Device
Regulation Act.

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 • During the trial, the prosecution presented the counterfeit credit card as
evidence.
• Cruz objected, arguing that it was not pre-marked during pre-trial.
• The trial court allowed its presentation, stating that it was part of an exhibit that
had already been presented and marked during pre-trial.
Issue:
• Whether the prosecution was able to prove beyond reasonable doubt that Cruz
was guilty of violating Section 9 (a) and (e) of the Access Device Regulation Act.
• Whether Cruz was deprived of due process due to the alleged negligence of his
former counsel.
Ruling:
• The prosecution was able to establish that Cruz had in his possession a
counterfeit access device, and therefore, he was guilty of the offense.
• Cruz was not deprived of due process and his counsel was able to adequately
defend his cause.
Ratio:
• The Supreme Court ruled that the trial court had the discretion to allow the
presentation of the counterfeit credit card as evidence.
• The alleged inconsistencies in the testimonies of the witnesses were minor and
did not affect the overall credibility of the prosecution's case.
• The court found that Cruz's former counsel's alleged negligence did not result in
a violation of his right to due process.
• The court emphasized that the right to counsel does not mean that the counsel
must be error-free or always successful in defending the accused.
• The court also noted that Cruz's counsel was able to cross-examine the
prosecution's witnesses and present evidence on his behalf.
• Therefore, the court upheld Cruz's conviction for possession and use of a
counterfeit credit card.

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Title: Soledad y Cristobal vs. People
Case: G.R. No. 184274
Mark Soledad is found guilty of Violation of Section 9 (e), Republic Act No. 8484, for
possessing a counterfeit access device or access device fraudulently applied for, after
he was caught using a credit card fraudulently obtained from the complainant.
Facts:
• Mark Soledad y Cristobal was found guilty of Violation of Section 9 (e), Republic
Act No. 8484, for possessing a counterfeit access device or access device
fraudulently applied for.
• The incident occurred in June 2004 when the private complainant, Henry C. Yu,
received a call from a credit card agent offering a loan assistance.
• Yu invited the agent, Rochelle Bagaporo, to his office where she introduced him
to her boss, Mark Soledad.
• Yu submitted various documents for the loan application but later discovered that
his credit card information was altered and additional mobile phone numbers
were registered under his name without his knowledge.
• Yu filed a complaint with the National Bureau of Investigation (NBI) and an
entrapment operation was conducted.
• During the operation, the NBI apprehended Soledad who presented identification
cards bearing Yu's name and signature.
• Soledad was charged with Violation of Section 9 (e), and after trial, he was found
guilty by the Regional Trial Court (RTC) and the Court of Appeals (CA).
Issue:
1. Whether or not the Information is valid.
2. Whether or not the Information charges an offense, or the offense petitioner was
found guilty of.
3. Whether or not petitioner was sufficiently informed of the nature of the
accusations against him.
4. Whether or not petitioner was legally in "possession" of the credit card subject of
the case.

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Ruling:
• The Information filed against Soledad was valid and sufficient.
• Soledad was sufficiently informed of the accusations against him.
• Soledad was in possession of the credit card fraudulently applied for.
• Soledad's conviction and the penalty imposed by the lower court were affirmed.
Ratio:
• The opening paragraph of the Information, which stated the name of the accused
and the offense charged, complemented the accusatory portion and fulfilled the
constitutional requirement of notice.
• Soledad was sufficiently informed of the accusations against him as the acts
constituting the offense were clearly described in the Information.
• Soledad actively participated in obtaining possession of the credit card by
presenting identification cards with his picture but bearing Yu's name and forged
signature.
• Soledad's signature on the acknowledgment receipt indicated that he received
and possessed the credit card.
• Soledad had the intent to possess the credit card and actively participated in
acquiring it.

National Payment Systems Act, Republic

Act No. 11127
SECTION 1. Title
This Act shall be known as the "National Payment Systems Act."
SECTION 2. Declaration of Policy
It is hereby declared the policy of the State to ensure the stability and efficiency of the
national payment system by providing the legal infrastructure for the supervision and
oversight of payment systems. The State shall promote the safety, integrity, efficiency,
reliability, accessibility, and governance of payment systems as a vital cornerstone of a
modern economy.
SECTION 3. Scope and Application

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This Act shall govern the supervision and oversight of payment systems in the
Philippines. This Act shall apply to all payment systems, both large-value payment
systems (LVPS) and retail payment systems (RPS), operating in the country.
SECTION 4. Definition of Terms
For purposes of this Act, the following terms shall mean:
1. "Bangko Sentral" refers to the Bangko Sentral ng Pilipinas (BSP).
2. "Clearing" means the process of transmitting, reconciling, and confirming
payment orders or funds transfer instructions prior to the settlement.
3. "Interoperability" means the ability of different retail payment systems and
instruments to work together seamlessly.
4. "Large-Value Payment System (LVPS)" means a payment system that processes
large-value and time-critical payments, including but not limited to interbank
transfers, large-value retail payments, and other systemically important payment
transactions.
5. "National Payment Systems" means the entire structure, organization, and
processes established for the handling, clearing, and settlement of payments in
the Philippines.
6. "Payment System" means a system that enables payments to be made between
a payer and a beneficiary, involving the transfer of funds, the clearing, or the
settlement of payments.
7. "Payment System Operator" means any person or entity that operates a payment
system.
8. "Retail Payment System (RPS)" means a payment system that processes retail
payments, including but not limited to transactions involving individuals or
businesses for goods and services.
9. "Settlement" means the process of discharging obligations between two or more
participants in a payment system.
10. "Systemic Risk" means the risk that an event will significantly disrupt the
functioning of a payment system and the broader financial system.
11. "Systemically Important Payment System (SIPS)" means a large-value payment
system that could trigger systemic risk if it fails to operate smoothly.
12. "Participant" means any person or entity that is a direct or indirect user of a
payment system.
13. "Regulation" means the rules and regulations issued by the Bangko Sentral
pursuant to this Act.

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SECTION 5. Role of the Bangko Sentral
1. The Bangko Sentral shall have the primary responsibility for the supervision and
oversight of payment systems in the Philippines.
2. The Bangko Sentral shall establish the necessary rules, standards, and
procedures for the supervision and oversight of payment systems.
3. The Bangko Sentral shall promote the safety, integrity, efficiency, reliability,
accessibility, and governance of payment systems.
4. The Bangko Sentral may issue guidelines, circulars, or regulations to implement
the provisions of this Act.
SECTION 6. Licensing of Payment System Operators
1. No person or entity shall operate a payment system without first obtaining a
license from the Bangko Sentral.
2. The Bangko Sentral shall issue rules and regulations governing the licensing of
payment system operators.
3. The Bangko Sentral may revoke or suspend the license of a payment system
operator for violation of this Act or its implementing rules.
SECTION 7. Powers and Functions of the Bangko Sentral
The Bangko Sentral shall have the following powers and functions:
1. To supervise and regulate payment systems in accordance with this Act.
2. To establish and enforce rules and regulations governing payment systems.
3. To issue guidelines, circulars, and regulations for the implementation of this Act.
4. To conduct examinations, audits, and inspections of payment system operators.
5. To impose penalties and sanctions for violations of this Act or its implementing
rules.
6. To promote cooperation and coordination among payment system operators.
7. To maintain an updated registry of payment system operators.
8. To monitor and analyze payment system developments and trends.
9. To collaborate with other regulatory authorities on matters relating to payment
systems.
10. To perform such other functions as may be necessary to carry out the purposes
of this Act.
SECTION 8. Consumer Protection

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 1. Participants and users of payment systems shall have the right to fair and
transparent access to payment services.
2. The Bangko Sentral shall establish mechanisms to protect the rights of
consumers of payment services.
3. The Bangko Sentral may require payment system operators to disclose
information and terms and conditions related to payment services.
SECTION 9. Risk Management
1. Payment system operators shall implement risk management policies and
procedures to manage and mitigate risks.
2. The Bangko Sentral may issue guidelines on risk management for payment
systems.
3. Payment system operators shall have mechanisms in place to ensure the
security and confidentiality of payment transactions.
SECTION 10. Interoperability
The Bangko Sentral shall promote interoperability among payment systems to facilitate
efficient and accessible payment services.
SECTION 11. Regulatory Fees
The Bangko Sentral may impose fees and charges for the regulation and supervision of
payment systems.
SECTION 12. Penal Provisions
1. Any person or entity found violating this Act or its implementing rules shall be
subject to administrative fines.
2. Serious violations of this Act may be subject to criminal penalties, including
imprisonment.
3. The Bangko Sentral may impose fines and penalties for non-compliance with this
Act.
SECTION 13. Implementing Rules and Regulations
The Bangko Sentral shall issue the necessary rules and regulations to implement the
provisions of this Act.
SECTION 14. Separability Clause
If any provision of this Act is declared invalid or unconstitutional, the remaining
provisions shall remain in full force and effect.
SECTION 15. Repealing Clause

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All laws, decrees, orders, rules, and regulations, or parts thereof, inconsistent with this
Act are hereby repealed or modified accordingly.
SECTION 16. Effectivity
This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in
a newspaper of general circulation.
SECTION 17. Transitory Provision
For a period of one (1) year from the effectivity of this Act, existing payment system
operators shall be allowed to continue their operations without a license from the
Bangko Sentral, provided that they comply with the rules and regulations issued by the
Bangko Sentral. Existing payment system operators shall apply for a license within the
said one-year period.
SECTION 18. Review and Amendments
The Bangko Sentral shall conduct a periodic review of this Act and its implementing
rules and regulations to ensure their relevance and effectiveness. The Bangko Sentral
may recommend amendments to this Act as necessary.
SECTION 19. Appropriations
The necessary funds for the implementation of this Act shall be sourced from the budget
of the Bangko Sentral. The Bangko Sentral may also impose fees and charges for the
regulation and supervision of payment systems.
SECTION 20. Separation from Employment
Any officer or employee of the Bangko Sentral who is found to have committed an
offense under this Act or its implementing rules and regulations shall be subject to
administrative sanctions, including suspension or dismissal from office.
SECTION 21. Rules and Regulations
The Bangko Sentral shall issue the necessary rules and regulations to implement the
provisions of this Act. Such rules and regulations shall take effect fifteen (15) days after
publication in the Official Gazette or in a newspaper of general circulation.
SECTION 22. Implementing Rules and Regulations
Within ninety (90) days from the effectivity of this Act, the Bangko Sentral shall
promulgate the necessary rules and regulations to implement the provisions of this Act.
SECTION 23. Effectivity
This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in
a newspaper of general circulation.
SECTION 24. Repealing Clause

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All laws, decrees, orders, rules, and regulations, or parts thereof, inconsistent with this
Act are hereby repealed or modified accordingly.
SECTION 25. Separability Clause
If any provision of this Act is declared invalid or unconstitutional, the remaining
provisions shall remain in full force and effect.

BSP Circular 1108, 2021 (Virtual Assets)

Section 902-N VIRTUAL ASSET SERVICE PROVIDERS (VASP)
Policy Statement:
It is the policy of the Bangko Sentral to provide an environment that encourages
financial innovation while safeguarding the integrity and stability of the financial system.
The Bangko Sentral recognizes that virtual asset (VA) systems have the potential to
revolutionize the delivery of financial services by providing faster and more economical
means to transfer funds, both domestic and international, and may further support
financial inclusion. These benefits, however, should be considered along with the
attendant risks in VAs considering the higher degree of anonymity involved, the velocity
of transactions, volatility of prices, and global accessibility. It is for these reasons that
the Bangko Sentral shall ensure that the VA systems shall not be misused and that the
Philippines shall not be used for money laundering (ML), terrorist financing (TF), and
proliferation financing (PF) activities. In addition, VA transactions also pose other risks,
such as information technology (IT) risks, consumer protection, and financial stability
concerns, among others.
Furthermore, the Bangko Sentral recognizes that once fiat currency is exchanged or
converted into VA, it becomes easily transferrable, facilitating expedient movement or
transfer of funds and payment services, among others. In this manner, VASPs are
considered as money service businesses that are subject to the regulatory authority and
examination powers of the Bangko Sentral under R.A. No. 7653, as amended by R.A.
No. 11211. This Section shall govern the operations reporting obligations of VASPs in
the Philippines.

Scope:
These guidelines shall cover VASPs, as defined in this Section, that offer their services
or engage in VASP activities in the Philippines. These guidelines do not cover

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businesses involved in the participation and provision of financial services related to an
issuer's offer and/or sale of a VA, which fall within the jurisdiction of Securities and
Exchange Commission (SEC), and entities solely acting on their own behalf (i.e., not
engaged in the business of actively facilitating VA-related activities for the account of
others).
The guidelines outlined in this Section are based on leading standards such as the
Financial Action Task Force (FATF) Recommendations on anti-money laundering and
counter-terrorist financing standards, as well as other recognized risk management
principles, and shall serve as the Bangko Sentral's baseline requirement for all VASPs.

Definitions:
a. Virtual Asset (VA):
• Definition: Refers to any type of digital unit that can be digitally traded or
transferred, used for payment or investment purposes.
• Characteristics: It can be considered as "property", "proceeds", "funds", "funds
or other assets", or "corresponding value".
• Medium of Exchange: Used as a medium of exchange or a digitally stored
value within the community of VA users.
• Scope: Includes digital units of exchange:
• (i) with a centralized repository or administrator,
• (ii) decentralized with no centralized repository or administrator,
• (iii) created or obtained through computing or manufacturing effort.
• Legal Status: VAs are not issued nor guaranteed by any jurisdiction and do not
have legal tender status.
• Exclusions: Digital units used for:
• (i) payment of goods and services solely provided by the issuer or limited
set of merchants (e.g., gift checks),
• (ii) payment of virtual goods and services within an online game (e.g.,
gaming tokens), are not considered VAs.
• Previous Terminology: Virtual currencies, as previously defined in Bangko
Sentral Circular No. 944, are now referred to as VAs.
b. Virtual Asset Service Provider (VASP):

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 • Definition: Any entity offering services or engaging in activities facilitating the
transfer or exchange of VAs.
• Activities Involved:
• (1) Exchange between VAs,
• (2) Exchange between one or more forms of VAs,
• (3) Transfer of VAs, and
• (4) Safekeeping and/or administration of VAs or control over VAs.
• Previous Terminology: Virtual Currency Exchanges, previously defined in
Bangko Sentral Circular No. 944, are now referred to as VASPs.
c. VA Custodian:
• Definition: A VASP performing the act of safekeeping and/or administration of
VAs, as described in point (4) above.
d. Fiat Currency:
• Definition: Government-issued currency designated as legal tender in its country
of issuance through government decree, regulation, or law.
e. Money Service Business (MSB):
• Definition: Financial services involving the acceptance of cash, checks, other
monetary instruments, or other stores of value, and the payment of a
corresponding sum to a beneficiary through a communication, message, transfer,
or clearings network to which the service provider belongs.

Requirements for Issuance of Certificate of Authority (COA):

1. COA Application: A VASP shall secure a COA to operate as a Money Service
Business (MSB), pursuant to and upon compliance with the requirements under
Section 901-N.
2. Evaluation of Beneficial Owners: In the course of the COA application, the
Bangko Sentral shall take into account and extend its evaluation over the fitness
and propriety of the VASP's beneficial owners.
3. Registration Procedures: The VASP shall adhere to the registration procedures
under Appendix N-7.
4. Submission of Documents: The VASP shall submit the following documents to
the Bangko Sentral through the appropriate supervising department:

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 • Application for Registration
• Notarized Deeds of Undertaking (Appendices N-8 and N-9)
5. Compliance with Bangko Sentral Rules and Regulations:
• Outsourcing (Section 702-N)
• Liquidity Risk Management (Section 724-N)
• Operational Risk Management (Section 725-N)
• IT Risk Management including the area of IT Outsourcing/Vendor
Management Program (Section 726-N)
• Business Continuity Management (Section 727-N)
• Internal Control (Section 737-N)
• Anti-Money Laundering (Sections 607-N and 502-N)
• Financial Consumer Protection (Sections 707-N, 702-N, and 703-N)
• Sound corporate governance principles, among others.

Minimum Required Capital:

• VASP with safekeeping and/or administration services for VAs (i.e., VA
Custodian): P50.0 million
• VASP without safekeeping and/or administration services for VAs: P10.0
million

Registration and Annual Service Fees for VASPs:

According to BSP Circular No. 1108, a Virtual Asset Service Provider (VASP) is
required to pay the registration and annual service fees as provided under Section 901-
N of the regulations. The specific fees would be outlined in that section of the
guidelines.
These fees are essential for the VASP to maintain its registration and compliance with
the Bangko Sentral's regulations concerning Virtual Asset Service Providers. The exact
amounts and procedures for payment should be detailed in the relevant section of the
guidelines.

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Wallet Security for VASPs:
Virtual Asset Service Providers (VASPs) offering wallet services for holding and storing
Virtual Assets (VAs) are required to establish a robust cybersecurity framework. This
framework should include appropriate security measures and controls within their VA
platform. The goal is to ensure:
1. Confidentiality: Protection of sensitive data and information uploaded, stored,
processed, and transmitted within the system. This includes user information and
transaction details.
2. Integrity: Ensuring that data and information remain accurate, complete, and
unaltered throughout their lifecycle within the VA platform.
3. Availability: The system should be available and accessible to users when
needed, without unauthorized disruptions or downtime.

Key Security Measures:

1. Cybersecurity Framework: VASPs must develop and implement a
comprehensive cybersecurity framework tailored to their operations. This
framework should address various aspects of cybersecurity, including network
security, access controls, encryption, and incident response.
2. Protection Against Threats: The security measures should safeguard against a
range of threats, including malware, cyber-attacks, phishing attempts, and other
evolving risks in the digital space.
3. VA Wallet Protection: Specific provisions should be in place to secure VA
wallets against cyberthreats. This includes encryption of wallet data, multi-factor
authentication for access, and secure storage practices.
4. Protection of Fiat Currency (if applicable): If VASPs are also handling fiat
currency within their platform, the cybersecurity framework should extend to
protect these assets as well.

Compliance and Risk Mitigation:

• VASPs must comply with these security measures to mitigate the risk of data
breaches, financial losses, and reputational damage.

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 • Regular security audits and assessments are necessary to ensure the
effectiveness of the cybersecurity framework.
• Compliance with industry standards and best practices in cybersecurity, as well
as adherence to regulatory requirements, is essential.

Technology Outsourcing:
• Risk Management: VASPs must implement a robust risk management system to
mitigate risks associated with outsourcing. This includes ensuring confidentiality,
data privacy, data management, contract management, security, and
performance monitoring.
• Responsibility: VASPs are responsible for the performance of outsourced
services as if they were directly performing the activity themselves.

Internal Control:
• System Requirement: VASPs must maintain an internal control system
appropriate to the size and complexity of their operations.
• Critical Functions: Key functions such as risk management, audit, compliance,
anti-money laundering, and information security must be performed by
competent officers.
• Corporate Governance: The board of directors and management must undergo
suitability assessments according to sound corporate governance procedures.

Financial Consumer Protection:

• Customer Awareness: VASPs must educate customers on safeguarding their
VA and/or fiat currency wallets, protecting login credentials, using mobile
platforms and wallets, understanding fees and charges, and problem resolution
procedures.
• Loss and Liability: Terms and conditions regarding settlement of losses and
liabilities from security breaches, system failures, or human errors must be
clearly communicated to customers.

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Risk Disclosure:
• Material Risks: VASPs must disclose all material risks associated with acquiring,
possessing, and trading VAs. This includes risks related to custody of VAs and
whether customers have full control over safeguarding their assets.
• Clarity: Disclosures should be clear, fair, and not misleading, ensuring
customers have a comprehensive understanding of associated risks.

Customer Due Diligence:

• Transactions: VASPs must conduct customer due diligence when establishing
business relations, conducting relevant transactions, or in cases of suspicion of
money laundering or terrorist financing.
• Transaction Value: Relevant business transactions are those amounting to
P5,000 or more, or linked transactions with an aggregate value of P5,000 or
more.

Additional Requirements:
• Engagement with Others: VASPs can only engage with duly authorized VASPs,
financial institutions, remittance companies, and transfer companies.
• Accreditation: VASPs must have a robust due diligence and accreditation
process for listing or trading VAs on their platform.
• Fraud Risk Management: Adopt a fraud risk management system
commensurate with the risks associated with specific VA types or activities.

Clearing and Settlement:

• Regulated Entities: All transactions and activities must be undertaken with
regulated VASPs and platforms to maintain a chain of regulated entities.

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 • Liquidity Requirement: VASPs with fiat wallets for conversions must maintain
sufficient liquid assets to meet VA redemptions promptly.
• VA Custodians: Those responsible for customer VA custody must have
measures to ensure adequate reserves and proper recording and segregation of
customers' VAs.

Compliance and Reporting:

• Bangko Sentral Requirements: Compliance with Bangko Sentral requirements,
rules, regulations, and requests for data submission.
• Other Regulatory Authorities: Compliance with applicable rules issued by other
regulatory authorities.

Transactional Requirements for VASPs

When conducting or facilitating VA transfers, VASPs and other BSFIs must treat all VA
transfer transactions as cross-border wire transfers and comply with pertinent rules on
wire transfers as outlined in Part Six (AML Regulations) of the Manual.
For VA transfers equal to or exceeding P50,000.00 (or its foreign currency equivalent),
the originating institution must obtain and retain accurate originator and beneficiary
information, transmitting this data to the beneficiary institution. Beneficiary institutions, in
turn, must obtain and retain this information as well. All collected information must be
available upon request by competent authorities.
The required information for VA transfers includes:
1. Originator's Information:
• Name of the sending customer (originator).
• Account number of the originator used for the transaction (e.g., VA wallet).
• Physical address, national identity number, or customer identification
number uniquely identifying the originator.
• Date and place of birth of the originator.
2. Beneficiary's Information:
• Name of the beneficiary.

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 • Account number of the beneficiary (e.g., VA wallet if used for the
transaction).
This information must be transmitted immediately and securely. VASPs must maintain
the confidentiality, integrity, and availability of this data for recordkeeping and use by
receiving VASPs or other covered entities, preventing unauthorized disclosure.
Entities should submit this required information simultaneously or concurrently with the
transfer itself.

Large Value Pay-outs:

For large value pay-outs exceeding P500,000 (or its foreign currency equivalent) in any
single transaction with customers or counterparties, enhanced due diligence is required.
Such pay-outs should only be made through:
• Check Payments: Issuing a check payment to the beneficiary.
• Direct Credit: Transferring funds directly to the beneficiary's deposit account.
• Account-to-Account Transfer: Using electronic fund transfer facilities for
account-to-account transfers.

Notification and Reporting Requirements

A VASP must adhere to the notification and reporting obligations as detailed in Section
901-N. Additionally, the VASP is responsible for maintaining records and submitting the
following reports to the appropriate supervising department of the Bangko Sentral:
1. Annual Financial Statements (AFS):
• Frequency: Annually
• Due Date: Not later than 120 calendar days after the close of the
reference calendar or fiscal year.
• Note: AFS must be audited by an external auditor included in the List of
Selected External Auditors for BSFIs.
2. Quarterly Report on Total Volume and Value of VCs Transacted:
• Frequency: Quarterly
• Due Date: Ten (10) business days from the end of the reference quarter.

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 3. List of Operating Offices and Websites:
• Frequency: Quarterly
• Due Date: Ten (10) business days from the end of the reference quarter.
• Certification: Duty certified by the Proprietor/Managing Partner/President
or any officer of equivalent rank.

Record Maintenance
A VASP must ensure that transaction and due diligence records are maintained for a
minimum period of five (5) years. Additionally, the VASP must adhere to other
guidelines issued by the Bangko Sentral regarding the maintenance of records.

Sanctions
In case of violations, appropriate monetary penalties, sanctions, and other enforcement
actions specified under Section 901-N will be imposed on the VASP, its directors,
and/or officers. These sanctions are designed to enforce compliance and ensure
accountability within the framework of the guidelines.

Section 2: Revised Appendices in the MORNBFI

Appendices in the Manual of Regulations for Non-Bank Financial Institutions
(MORNBFI) that previously made reference to "Virtual Currency Exchanges" are now
revised as follows:

Appendix Existing Phrase New Phrase

Deed of Undertaking on Compliance with Deed of Undertaking on Compliance with

the Requirements on Money Service the Requirements on Money Service
Business Operations and Virtual Currency Business Operations and Virtual Asset
N-8 Exchanges Service Providers

Registration Procedures for RMC/FXD Registration Procedures for RMC/FXD

(Appendix to Sec. 901-N on Money (Appendix to Sec. 901-N on Money
Service Business Operations and Sec. Service Business Operations and Sec.
N-7 902-N on Virtual Currency Exchanges) 902-N on Virtual Asset Service Providers)

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Appendix Existing Phrase New Phrase

N-8 Deed of Undertaking (No change)

N-9 Deed of Undertaking (No change)

Section 3: Transitory Provisions

Bangko Sentral-registered Virtual Currency Exchanges, as well as Virtual Asset Service
Providers (VASPs) currently operating without Bangko Sentral approval, shall apply for
a Certificate of Authority not later than three (3) months from the effectivity of this
Circular. Upon submission of the application, these entities may continue to operate
their business unless instructed otherwise.

Compliance Deadline for VASPs

All VASPs must comply with the applicable requirements prescribed within this Circular
within six (6) months from its effectivity. Failure to comply with these requirements shall
subject the entity to the appropriate enforcement action provided under Section 901-N.

Section 4: Effectivity Clause

This Circular shall take effect fifteen (15) calendar days following its publication in the
Official Gazette or any newspaper of general circulation.

Bitcoin mining in the Philippines:

Legal Status
• Cryptocurrencies, including Bitcoin, are legal in the Philippines.
• The Bangko Sentral ng Pilipinas (BSP), the country's central bank, has
recognized cryptocurrencies as a legitimate payment method and remittance
tool.
Regulation of Cryptocurrencies
• The BSP has issued guidelines for virtual currency exchanges (VCEs), which are
platforms where cryptocurrencies can be bought, sold, or exchanged for fiat

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 currency. These guidelines are outlined in Circular No. 944 (Guidelines for Virtual
Currency Exchanges).
• Virtual currency exchanges must register with the BSP and comply with anti-
money laundering (AML) and counter-terrorism financing (CTF) regulations.
Mining Specifics
• Mining, the process by which new Bitcoins are created and transactions are
verified on the blockchain, is not specifically addressed in Philippine law.
• There are no explicit regulations or laws that prohibit or regulate Bitcoin mining in
the Philippines as of the last update.
Electricity Costs
• One consideration for Bitcoin miners is the cost of electricity, which can vary in
different regions of the Philippines.
• Miners need to assess the profitability of mining based on electricity costs,
mining equipment expenses, and the current price of Bitcoin.
Taxation
• Income generated from Bitcoin mining is subject to taxation in the Philippines. It
falls under the category of "other income" in the tax code.
• The Bureau of Internal Revenue (BIR) has issued guidelines on the taxation of
cryptocurrencies, including mining income. This includes the requirement to
register as a taxpayer and declare mining income for tax purposes.
Risk and Volatility
• Bitcoin mining, like any investment or business venture, carries risks. These
include the volatility of cryptocurrency prices, changes in mining difficulty, and
hardware and maintenance costs.
Seeking Legal Advice
• Individuals or companies interested in Bitcoin mining in the Philippines should
consider seeking legal advice from experts familiar with cryptocurrency
regulations in the country.
• It's essential to stay updated with any changes in regulations or guidelines issued
by the BSP or other relevant authorities.

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