The securities watchdog of Philippines has recently raised a caution signal by saying that it might consider regulating the digital currency cloud mining contracts under the existing securities rules of the country.

On Tuesday, Philippines’ Securities and Exchange Commission (SEC) has issued a statement that asks could mining contracts to be classified as securities as the process involves with the idea of money investments made in expectation of profitable returns.

Cloud mining is a process which allows everyone to invest in it without burning your cash by buying high-end hardware, but rather buy a stake in the mining process on a remote facility elsewhere through a contract.

The Philippines SEC said that it took this decision after observing different firms and individuals advertising and wooing investors, which the agency considers as an unregistered issuance of securities.

The regulator has clearly mentioned that any individual or entity – including workers, recruiters, promoters and salesman – involved in the activity of offering cloud mining contracts in the country without undergoing through the due registration process will be subjected to a sentence of 21 years of prison.

This is yet another tough stance taken by the Philippines on its latest crackdown on crypto-related activities in the recent months. The Philippines SEC is currently working on formulating laws for Initial Coin Offerings (ICOs) while keeping a strict eye on all the crypto-related activities that fall under the scope the existing securities rules.

Regulating cryptocurrencies has been currently a major priority for most of the countries after the increased reported activities of tax evasion and money laundering. It all started earlier this year after the major crypto bull run of 2017 when South Korea decided to regulate digital currencies.

Owing to increased regulatory pressure, there has been a huge withdrawal of retail participation in the crypto markets resulting it to correct it by 70 percent from the start of the year.