Recognizing the risks involved in using virtual currencies, Opposition Senator Leila M. de Lima has filed a measure seeking to impose stiffer penalties for crimes involving cryptocurrencies, notably bitcoins.
In filing Senate Bill (SB) No. 1694, De Lima said the criminal justice system must be prepared in case virtual currency like bitcoins–which is increasingly becoming popular–is used in unlawful activities.
“With the emerging threats of its use in the commission of crimes, our penal laws must adapt with the changing times and our criminal justice system must come prepared in the event that this is used in illegal activities,” she said.
“Due to its anonymous or pseudonymous character, law enforcement agencies may encounter difficulty in tracing the user or owner of a virtual currency used in the commission of crimes, thereby necessitating a higher penalty for its use,” she added.
Virtual currency, defined by Bangko Sentral ng Pilipinas as, “any type of digital unit that is used as a medium of exchange or a form of digitally stored value created by agreement within the community of virtual currency users.”
Based on a research conducted by Cambridge University, there are between 2.9 million and 5.8 million persons who are actively using virtual currency wallets.
De Lima noted that illegal activities involving virtual currency include “estafa where unscrupulous individuals entice unsuspecting people to purchase fake bitcoins, sending a virtual currency as payment for child pornography, or a public officer agreeing to perform an act in consideration of payment in bitcoins (direct bribery).”
“Since virtual currency resemble money, the possibilities are endless,” she said, mindful that the risks involving the use of virtual currency may include money laundering and terrorist financing, among others.
Under SB No. 1694, all crimes defined in the Republic Act No. 3815 or the Revised Penal Code (RPC), when committed through and with the use of virtual currency, will have a penalty that is one degree higher than what is provided for by the RPC.
De Lima’s measure also proposed that the gravity of the crime will be based on the value of the virtual currency in Philippine peso, as determined by the Bangko Sentral ng Pilipinas (BSP), at the time of the commission of the crime.
In addition to the penalty imposed for the crime committed, the Senator from Bicol proposed that the government will have to confiscate the cryptocurrency used in the misconduct, unless it is a property of another person not liable for the unlawful act.
At present, the legal status of virtual currencies varies from country to country, she added.
In some jurisdictions such as Japan, the United States, United Kingdom, and Italy, the use and trading of virtual currencies are legal while countries such as China, South Korea, Bangladesh, and Bolivia have altogether banned the use of virtual currencies.