MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) has revoked SquidPay Technology’s electronic money issuer license and registration as an operator of payment system, but how this development impacts on the e-wallets of the local fintech company’s fast-growing user base remains unclear.

Currently, the SquidPay app is still available for download on the Apple App Store. Its e-wallet functions, such as topping up, still appear to work. SquidPay’s website, however, is offline. As of press time, SquidPay has yet to respond to inquiries from Rappler about how BSP’s resolution would affect its users. 

This uncertainty comes as the Monetary Board of the BSP has “denied with finality” SquidPay’s motion of reconsideration regarding the revocation of its license and registration. In its resolution dated January 19, the BSP cited the following to support its decision:

• “Issuance and operations of electronic money” – Section 402-N of the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI)
• “National retail payment system” – Section 501-N of the MORNBFI
• “Anti-money laundering regulations” – Section 601-N of the MORNBFI
• “Administrative sanctions on banks and quasi-banks” – Section 37 of The New Central Bank Act
• “Administrative sanctions” – Section 19(e) of The National Payment Systems Act
• The Anti-Money Laundering Act of 2001 and its revised Implementing Rules and Regulations

While the BSP did not elaborate on SquidPay’s specific violations, the provisions cited relate to sanctions in cases of money laundering and “fraud and other transactions contrary to law, good morals and public policy.”

The BSP also noted SquidPay’s violation of its notarized Deed of Undertaking, although it did not specify the specific violation committed.

In its official statement, SquidPay said it was “deeply saddened” by the BSP’s decision. 

“Despite our best efforts to fully address the concerns from our initial audit, which included a voluntary proposal to undergo rehabilitation with supervision as needed, we believed that the decision to revoke our operating license came as a severe penalty,” the statement read.

“SquidPay, on the other hand, assures the public that it has never been involved in any incidents related to cyber security breaches, theft, loss of public funds, or money laundering,” the statement added.

The fintech company said that, as a startup, it ought to have been afforded “guidance and support.” It is currently still seeking other legal remedies. 

SquidPay is also embroiled in a messy legal battle with Premiere Horizon Alliance Corporation (PHA), the investment holding company that had planned to acquire a 33% stake in the fintech company. In October 2022, PHA had pulled out of the deal after its board of directors determined SquidPay’s “inability to operate as a viable business.”

Months later, PHA filed a criminal complaint against SquidPay’s founder, Marvin dela Cruz, and a member of PHA’s board of directors “for the alleged misappropriation of the sum of P32,000,000 in corporate funds in connection with a Bonifacio Global City Project.” 

On December 28, 2022, the Office of the Prosecutor of Pasig City issued a resolution finding probable cause to indict Dela Cruz and the PHA board director for the crime of estafa. – Rappler.com