Axie Infinity not registered with SEC; no license to sell or trade in PH

Securities and Exchange Commission (SEC) announced popular play-to-earn game Axie Infinity or Sky Mavis is not registered. It also has no licensed to sell or trade securities in the Philippines.

“The SEC has received numerous inquiries regarding Axie Infinity as well as other play-to-earn platforms and schemes. This has been a topic of discussion within the PhiliFintech Innovation Office (PIO) and other operating departments,” the SEC informed Business Bulletin.

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“We are currently investigating regulatory touch points and studying its economic impact and risk exposure to Filipinos,” it added.

Axie Infinity is a trading and battling game that allows players to collect, breed, raise, battle, and trade creatures known as “axies” (characters based on axolotl), which are digitized as NFTs. New players need to have at least three axies to play.

Completing the battles would yield rewards in the form of cryptocurrencies.

According to SEC’s database, the Commission said, “Axie Infinity or Sky Mavis is not licensed to do business in the Philippines as a branch, regional area/operating headquarters or a representative office.” “It also does not possess any secondary license to conduct any regulated activity within the Philippines,” the SEC said.

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Axie Infinity not registered with SEC; no license to sell or trade in PH

“The public is always reminded to be vigilant, if not, avoid transacting with entities without any primary registration or licenses to do business in the Philippines in order to avoid losing their hard-earned money,” SEC warned.

SEC has jurisdiction over digital assets classified as securities.

“The Securities Regulation Code is clear as to what constitutes securities. Moreover, Philippine case law is clear as to what constitutes an investment contract,” it added.

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In its advisory dated January 8, 2021, “the Commission stated that some of these new virtual currencies, based on the facts and circumstances surrounding their issuance, follow the nature of a security as defined by Section 3.1 of the Securities Regulation Code (SRC).”

Also, “when a virtual currency is likewise analogous to any of the types of securities under Section 3.1 of the SRC, there is a strong possibility that the said virtual currency is a security under the jurisdiction of the SEC and has to be registered and necessary disclosures have to be made for the protection of the investing public.”

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