Think tank Infrawatch has called on the Securities and Exchange Commission (SEC) to strengthen its crackdown on unregistered crypto platforms, warning that enforcement gaps continue to allow fraud and abuse in the digital asset market.

Infrawatch Convenor Terry Ridon welcomed the SEC’s launch of the Strategic Surveillance and Enforcement Sandbox (StratBox), but stressed that the initiative must be matched with tougher actions against illegal operators.

Launched in May, the StratBox allows licensed Crypto Asset Service Providers (CASPs) to test new financial products under regulatory oversight.

“The sandbox model supports innovation but only for regulated and licensed entities. The use of crypto for illicit activities remains rampant, particularly on unregulated and unlicensed firms, and the government should crack down on firms operating in the Philippine market,” Ridon said.

Ridon said if the SEC enforces strict compliance among licensed exchanges, it should take equally strong action against unlicensed platforms.

“If the SEC seeks strict compliance from licensed cryptocurrency exchanges, it should undertake stronger measures to crack down on unlicensed exchanges operating in the Philippines, particularly through advisories warning the public against investing in these firms,” Ridon said.

He added that unregistered platforms are often used for online scams, money laundering, and other illicit activities — many of which have already harmed Filipino investors.

Ridon also urged the SEC to collaborate with the National Telecommunications Commission to restrict access to illegal crypto platforms, similar to its earlier move to block Binance from operating in the Philippines without proper registration.

“Compliant players are subject to strict regulatory requirements, while unlicensed entities often operate with fewer restrictions, creating a distorted environment where non-compliance appears more profitable,” he said. “This sends the wrong signal to the market and undermines confidence in the regulatory framework.”