$150 Million Frozen Crypto Assets in the Philippines: What Happened and What It Means for Users

$150 Million Frozen Crypto Assets in the Philippines: What Happened and What It Means for Users

In early 2025, the Philippine Securities and Exchange Commission (SEC) froze $150 million in cryptocurrency assets tied to 20 unlicensed exchanges operating in the country. This wasn’t a random move. It was the government’s biggest enforcement action yet against crypto platforms that skipped the rules - and it left thousands of everyday users locked out of their money with no clear way out.

The Philippines has one of the highest rates of crypto adoption in the world. By March 2025, Filipinos had invested over ₱6 trillion (around $107 billion) in digital assets. Coins.ph alone had over 20 million users. But while retail investors rushed in, many of the platforms they used never got licensed. The SEC had waited three years for clarity, thanks to a 2022 moratorium on new licenses from the Bangko Sentral ng Pilipinas (BSP). When that pause ended, regulators moved fast - and hard.

Why Did the SEC Freeze These Assets?

The SEC didn’t target big international exchanges like Binance or Bybit because they were foreign. They went after platforms that claimed to serve Filipinos but never registered under new rules issued in January 2025. Those rules, outlined in SEC Memorandum Circular No. 4-2025 and No. 5-2025, defined what counts as a crypto-asset and who qualifies as a Crypto-Asset Service Provider (CASP). If you ran a platform that let people trade, store, or convert crypto - and you didn’t apply for a license - you were breaking the law.

The frozen assets were mostly stablecoins: 68% were USDT and USDC. Bitcoin made up 22%, and altcoins the rest. Most of the money sat on Ethereum (45%), Binance Smart Chain (30%), and Tron (15%). These weren’t random wallets. They were accounts linked to platforms that had no legal obligation to protect user funds, no audit trails, and no accountability.

Regulators say the move was necessary. Chainalysis reported $2.17 billion stolen from crypto services globally in the first half of 2025. The Philippines, with its high adoption rate and low financial literacy in some areas, was seen as a target for scams. The SEC argued freezing these funds was like shutting down a warehouse full of stolen goods - even if some of the stuff inside belonged to honest people.

Who Lost Money - and How Much?

It’s not just big investors who got caught. The average loss per affected user was $4,670. That’s not pocket change. For many Filipinos, it’s months of salary. Reddit threads like “My $15k frozen in Bitget PH - What now?” got over 1,200 upvotes. Trustpilot reviews for blacklisted platforms dropped from 4.2 stars to 1.3 in just two months. Common complaints? “No warning.” “No contact.” “No process.”

The Philippine Consumer Welfare Association received over 3,200 formal complaints between January and June 2025. Most users had no idea the platform they used wasn’t licensed. A survey by the Association of Cryptocurrency Enthusiasts of the Philippines found 78% of users didn’t know the licensing rules. They trusted apps because they worked - no red flags, no warnings. Now, their money is stuck in a legal gray zone.

The Recovery Process: A Maze of Paperwork

The SEC created the Crypto Asset Recovery Unit (CARU) in April 2025 to help users get their money back. Sounds good, right? Here’s the catch: you need to prove you didn’t do anything illegal.

To apply, you must submit:

• A government-issued ID
• Proof of ownership (blockchain transaction hashes, wallet addresses, screenshots)
• A sworn statement that your funds weren’t from fraud, money laundering, or other crimes

By July 2025, only 12% of affected users - about 3,840 people - had completed the process. The average wait time? 47 days. And 34% of applications got rejected for incomplete documents. Another 22% were flagged for deeper investigation. For older users or those without tech experience, this was impossible. One 68-year-old grandmother in Cebu tried to submit her transaction history but didn’t know what a wallet address was. She gave up after three weeks.

Coins.ph, one of the few licensed platforms, saw a 300% spike in support tickets. Their average response time jumped from 12 hours to 72 hours. They’re helping where they can - but they’re not responsible for funds on other platforms. That’s the problem: there’s no central recovery system. You’re on your own.

How This Compares to Other Countries

The Philippines isn’t alone in freezing crypto. In 2024, the U.S. Treasury’s OFAC froze $150 million in USDT tied to sanctioned Russian entities. But that was about international sanctions. The Philippine action was domestic - targeting local platforms that broke local rules.

Singapore suspended Tokenize Xchange in July 2025 for mixing customer funds with company money. But they only acted against one platform. The Philippines went after 20 at once. That’s aggressive. It’s also risky. In the UAE, crypto rules are looser. Some of these blacklisted platforms just moved there. The money didn’t disappear - it just left the country.

Compared to global leaders like the U.S. or EU, the Philippines’ rules are still basic. But their enforcement is faster and more direct. That’s both a strength and a weakness. It shows they mean business. But it also shows they’re still learning how to do it fairly.

What’s Next? The Regulatory Sandbox and License Renewals

On September 1, 2025, the BSP’s three-year freeze on new crypto licenses officially ended. On September 15, the first round of applications opened. But the SEC didn’t wait for that. They launched a Regulatory Sandbox on September 15, 2025 - allowing 10 pre-screened platforms to operate under temporary licenses while the full framework is built.

That’s a smart move. It gives legitimate businesses a path forward without letting chaos continue. But it also means the $150 million in frozen assets could stay locked for months - maybe years - while legal battles play out. Bitget and Bybit are challenging the freeze in court. If they win, the SEC may have to return funds. If they lose, the money might be permanently seized.

On November 1, 2025, the SEC announced it would begin releasing verified funds. But only if you passed the CARU process. And even then, there’s no guarantee you’ll get it all back. Some platforms may have spent the money. Others may have hidden it across chains. Recovery isn’t guaranteed - just possible.

What This Means for You

If you’re a Filipino crypto user, here’s what you need to know:

• Only use platforms licensed by the SEC. Check the official list on sec.gov.ph.
• Never store large amounts on exchanges. Use a hardware wallet or cold storage.
• Keep records of every transaction - wallet addresses, timestamps, screenshots.
• If your funds are frozen, apply to CARU immediately. Don’t wait.
• Don’t trust platforms just because they’re popular. Popularity doesn’t mean legality.

If you’re thinking of investing now, the message is clear: regulation is here. The wild west days are over. The market is growing, but the rules are tightening. The $150 million freeze wasn’t just about punishing bad actors. It was a warning: if you want to play in crypto in the Philippines, you need to play by the rules - or you’ll get left out.

Will This Make Crypto Safer in the Philippines?

Some say yes. The 27% of users who supported the freeze believe it will clean up the market. Others say no - that innocent people are being punished while real criminals escape.

The truth? It’s messy. The SEC acted fast because the problem was getting worse. But they didn’t prepare users for the fallout. No public campaign. No easy-to-understand guide. No hotline. That’s the real failure.

For now, the frozen assets sit on blockchains, untouched. Some will be returned. Some won’t. The market will adapt. New platforms will rise. And users? They’ll learn - the hard way - that in crypto, trust isn’t enough. Verification is.