Cryptocurrency cloud mining contracts will now be considered securities in the Philippines, and entities that intend to sell them must apply for the license.
[Source](
The Philippines Securities and Exchange Commission has stated that cryptocurrency cloud mining contracts qualify as Howey-tested securities.
A notice of April 10 in this regard explains that, in light of this guidance, such contracts must be "duly registered" before they are offered for sale, and the entities that sell them must obtain "the license and / or permit appropriate to sell securities to the public. "
When purchasing a cloud mining contract, an entity acquires the rights to a portion of the extracted tokens by using mining equipment owned by another person or group. Once issued, some cloud mining contracts can be bought and sold.
This scheme works in a different way to that of the mining groups, in which the members lend the hashrate of the equipment they really possess in exchange for a part of the tokens that the group receives as rewards of the block.
According to the document, the cloud mining contracts would be considered values according to the Howey test because they imply a "money investment", that investment is made in a "common enterprise", the investors expect profits in exchange for the purchase of the contracts, and those profits "are generated from the efforts of the cloud mining company".
The notice warns that entities that sell these contracts can be "prosecuted and criminally liable," and recommends that the public stop investing in unregistered cloud mining contracts.
In a cease-and-desist order issued in January issued against several entities with overlapping personnel, the SEC reported that, in some cases, an ICO is "essentially the same as a public offering of securities."
In March, Philippine senator Leila M. de Lima presented a bill that would impose penalties for more stringent crimes when those transgressions involve "cryptocurrencies, especially bitcoins."
Source: ETHNews
