Philippines SEC: Unregistered platforms like dYdX are prohibited from soliciting crypto investments in the country
The Philippines Securities and Exchange Commission (SEC) has issued a new investment warning, specifically naming decentralized derivatives platform dYdX and six other crypto platforms including Aevo, gTrade, Pacifica, Orderly, Deriv, and Ostium. These platforms are not registered in the Philippines and do not have the necessary Crypto Asset Service Provider (CASP) license to solicit investments or provide crypto asset services locally. The announcement emphasizes that these platforms are offering trading and investment products with profit or interest promises to the public in the Philippines, which constitutes unauthorized fundraising or solicitation of investments. Individuals and institutions promoting or referring these platforms within the Philippines may face criminal liabilities, including fines of up to 5 million pesos and imprisonment for up to 21 years.
This move continues the Philippines' stringent regulatory approach towards unlicensed foreign crypto platforms since 2025. Previously, Philippine regulators had issued multiple warnings and coordinated with the National Telecommunications Commission and internet service providers to block access to certain large centralized exchanges, requiring all trading services targeting Philippine users to be registered and licensed by the central bank and SEC. Local media and industry observers note that this round of naming is characterized by its focus on decentralized derivatives and contract protocols represented by dYdX, indicating that Philippine regulators are no longer only targeting traditional centralized platforms with licenses but are beginning to hold accountable the entire combination of "on-chain protocols + front-end websites + local promotion" as domestic business activities.
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This warning signifies that the Philippines has officially categorized "non-custodial, no headquarters, smart contract-driven" DeFi platforms as "unlicensed financial activities" in its regulatory logic, rather than viewing them as purely technical tools or in a "regulatory gray area." In the narrative surrounding protocols like dYdX, the protocol itself is governed by code and DAO, with front-ends deployed in multiple locations, and users accessing it through self-custody wallets, meaning the platform does not directly hold customer funds; however, the Philippines SEC draws the line at "providing financial services with profit promises to the local public," emphasizing that any solicitation aimed at local users for profit constitutes a licensed financial activity. This effectively resets the regulatory boundary based on "sales behavior and target market," rather than passively accepting the narrative that "as long as it is called a protocol and deployed on-chain, it is beyond regulatory reach."
From a regional perspective, the Philippines' actions are part of a "layered tightening" in Southeast Asia: on one side, Singapore and Hong Kong are trying to attract compliant crypto institutions through differentiated licensing, while on the other side, the Philippines and other markets with limited regulatory resources but high retail participation are cutting off local funds from direct connections to global unlicensed platforms through "blocking + heavy penalties for promoters." This approach may temporarily push some trading activities out of local banking and fiat channels into over-the-counter and gray areas, but from the regulatory perspective, it achieves at least two goals: first, it serves as a deterrent to retail investors, and second, it creates policy space for future cooperation with compliant platforms—those willing to register locally and comply with KYC and tax requirements have the opportunity to become "whitelisted," while the rest are gradually marginalized.
On a deeper level, the naming of DeFi protocols like dYdX also marks the encounter of the ideal of "code is law" with the reality of sovereign regulation. Protocols can be decentralized, but their ecosystems will inevitably touch the real world at certain points: front-end websites, brands, token issuers, market makers, local KOLs, and community organizations can all become targets for regulatory accountability. The Philippines SEC's explicit inclusion of "promoters and referrers" within the scope of criminal liability essentially tells the protocol world: even if smart contracts are beyond local judicial jurisdiction, once someone promotes, explains, packages, and promises returns for them within the country, these "human interfaces" can be regarded as unlicensed financial intermediaries, bearing local legal consequences.
From a global perspective, if this regulatory approach is replicated by more emerging markets, it will reshape the growth path of DeFi: protocols seeking to scale and attract fiat and retail traffic must find compliant interfaces in key markets—whether local licenses, cooperating brokers, or regulated front-end operators; otherwise, they will remain long-term confined to "on-chain native funding circles" and a small number of high-risk users. This will push DeFi from the early "borderless experiment" to a layered structure where "underlying protocols are globally available, but upper-layer access is tailored to local conditions": code can run globally, but when it comes to touching the wallets and fiat of a large number of local users, it must go through layers of compliance filtering. This means that for protocol designers and investors, the new moat is not just technology and liquidity, but also who can better build compliance and localization capabilities in key jurisdictions.