During the BitPinas webcast, which aired on January 8, 2025, and discussed the implications of the Securities and Exchange Commission’s proposed “Rules on Crypto-Assets Service Providers,” crypto lawyer Atty. Rafael Padilla expressed his support for the rules on marketing and promotions of crypto assets in the regulator’s draft of the soon-to-be-implemented regulation.
What’s the significance: The rule, if finalized, would protect investors from misleading promotions while ensuring genuine education platforms remain unaffected.
About SEC‘s Draft Rules on Marketing and Promotion of Crypto Assets
- Inclusions: Social media, events, paid media, and educational content.
- Prohibition: Unauthorized entities cannot promote crypto-assets.
- Requirements: Promotion must contain plain and clear language and disclose risks accurately without misleading content.
- Accountability: Providers must ensure agents and third-party marketers comply with regulations.
The Lawyer’s Pointers
- Padilla highlighted that as per the section seven of the draft rules, marketing activities, including endorsements and promotions, “may qualify” as marketing depending on intent and substance.
- He noted that the SEC is focusing on targeting misleading “education platforms” that promote or advertise token projects under the guise of education.
“Tama si SEC that those types of education so-called platforms of ‘KOLs,’ dapat they should be held into account and maco-consider nga ’yun na marketing, and once again, I’m okay with this as a policy. And I think tama si SEC dito, for as long as this will be applied only to crypto asset securities and platforms crypto intermediaries that provide securities-related transactions and arrangement.”
- He then emphasized that genuine education content should aim to educate, not mislead the public.
- For the crypto lawyer’s analysis, SEC can hold misleading education platforms and marketers accountable for promoting crypto asset securities.
- Meanwhile, Padilla sees that Freelance and paid promotions are likely not directly affected under the rules.
“It doesn’t mean that this will be an outright ban on affiliate marketing, community managers, even the education platforms that behave like promotion companies and advertising companies. Pero ang sinasabi lang ni SEC ay mag-ingat kayo. Kasi kung talagang education platform kayo, then do that, pero in substance ay nagma-market kayo, the SEC can run after you.”
Here are the English translations of Padilla’s statements quoted above:
“The SEC is right that those so-called educational platforms of ‘KOLs’ should be held accountable and considered as marketing. Again, I agree with this as a policy, and I think the SEC is correct here as long as this is applied only to crypto asset securities and platforms or crypto intermediaries that provide securities-related transactions and arrangements.”
“This does not mean there will be an outright ban on affiliate marketing, community managers, or even educational platforms that act like promotion or advertising companies. What the SEC is simply saying is to be cautious. If you are truly an educational platform, then act as one. But if in substance you are marketing, the SEC can pursue action against you.”
Worth Reading: Our SEC CASP – Crypto Assets Service Provider Series:
This article is published on BitPinas: Crypto Lawyer Backs SEC’s Draft Rules on Marketing
What else is happening in Crypto Philippines and beyond?
