Filipino regulators should crack down on unlicensed cryptocurrency platforms that are acting as a financial lifeline for organized crime, an official of the European Chamber of Commerce of the Philippines (ECCP) said Tuesday.
These unregulated platforms are fueling a “digital crime epidemic” in the Philippines, enabling kidnappings, human trafficking, large-scale scams, drug operations and illegal gambling, according to Dr. Reyner M. Villaseñor, co-chair of the ECCP ICT Committee.
“Criminal syndicates are exploiting regulatory gaps to carry out diverse illegal activities, using unlicensed and unregulated cryptocurrency platforms as their tools,” Villaseñor said.
These shadow platforms, he said, are enabling criminals to move millions in illicit funds with little to no trace—and the consequences are now surfacing in deeply alarming ways.
Citing data from the Global Anti-Scam Alliance, Villaseñor said Filipinos lost an estimated P460 billion to online crime in 2024—equivalent to 1.9 percent of the gross domestic product. This figure, however, represents only a portion of a much broader ecosystem of digitally enabled crimes that extend beyond purely online activity, he said.
The Bangko Sentral ng Pilipinas recorded P5.82 billion in losses in cybercrime incidents among supervised financial institutions, marking a staggering 212-percent increase year-on-year.
“These numbers paint a grim picture: the Philippines is now in the midst of a digitally enabled crime epidemic – one that calls for immediate public vigilance, private sector safeguards, and proactive regulatory intervention and law enforcement action,” Villaseñor said.
Without properly audited KYC and AML controls—standards mandated on licensed platforms—these rogue exchanges offer near-total anonymity, he said.
Criminals exploit these blind spots to launder ransom payments, conceal profits from human trafficking and move massive sums without triggering regulatory red flags, said Villaseñor.
He cited for instance the case of businessman Anson Que, whose P200-million ransom was converted to cryptocurrency to make tracing efforts difficult.
Some platforms even provide advanced obfuscation tools such as coin mixers and privacy-centric tokens, deliberately designed to erase digital trails and evade detection, he said.
He said law enforcement agencies are hitting the wall. Villaseñor said while local virtual asset service providers (VASPs) routinely comply with court orders and freeze illicit wallets, foreign-based unlicensed exchanges routinely reject such requests—hiding behind jurisdictional loopholes and offshore privacy laws.
Their non-cooperation stalls investigations and enables criminals to operate with impunity, he said.
Despite advisories, cease-and-desist orders and blocking directives from the NTC, major unlicensed crypto exchanges continue to operate freely in the Philippines—accessible not only to Filipinos but also to foreign criminal syndicates exploiting the country as a hub for illicit finance, he said.
Villaseñor warned of inconsistent enforcement, with some platforms flagged while others face no action at all.
“This is not just a regulatory oversight—it’s a national security crisis in the making,” Villaseñor said.
He called for an urgent, coordinated crackdown from the Securities and Exchange Commission (SEC), the Department of Information and Communications Technology (DICT), the Bangko Sentral ng Pilipinas (BSP), and other relevant agencies.
Villaseñor outlined critical action points: immediate delisting of unauthorized crypto apps, strict ISP-level enforcement to block access, deployment of advanced cybercrime tracking technologies and a comprehensive digital literacy campaign to protect Filipinos from falling prey to crypto-enabled crimes.
