LYKA to Comply With BSP Requirements After Being Ordered to Cease Operating

LYKA, creator of the popular “Lyka Gems” has released a letter of support vowing to fulfill its obligations to the Bangko Sentral ng Pilipinas (BSP) and its partner merchants. The BSP earlier asked LYKA to suspend its activities in the Philippines because it is not a licensed operator of payment system (OPS). The BSP also said it is inviting the company to register as an OPS.

According to the letter, Lyka said it is doing its best to comply with the BSP’s requirements for becoming Operator of Payment System (OPS). Its major partner Digital Spring Advertising and Marketing Inc., is now communicating with the central bank and “rest assured that Digital Spring will continue to fulfill its obligations with its partner merchants in parallel to its ongoing compliance with BSP’s requirements.”

“In fact, as of July 21, 2021, the BSP has issued OPS Provisional Certificate of Registration (with OPS Registration No. OPS-202107-008) in favor of Digital Spring,” the company said in a statement.

Under Republic Act 11127 or the National Payment Systems Act (NPSA), “any person who provides clearing or settlement services in a payment system, or defines, prescribes, designs, controls or maintains the operational framework for the system” must register as an operator of payment system

Lyka is a social media platform that is also being promoted by well-known Filipino celebrities like Ivana Alawi, Nadine Lustre, and Coco Martin. Lyka allows its users to purchase, exchange, and use gift cards in electronic mode and it also has an in-app currency called “GEMS”, that is also supported in SM Savemore, Realme, Oppo, Huawei stores and more.

Users who sign up on Lyka can have an initial 50 GEMS. They can also earn around 0.02 to 0.05 GEMs for activities like posting, sharing and engaging with other Lyka users as well.

In an op-ed, Luis Buenaventura II, co-founder of crypto platform BloomX said that while it appears that the BSP does not see Lyka as a scam (otherwise the notice would have come from the Securities and Exchange Commission), companies and personalities may have to rethink of their partnership with the platform, especially if the licensing process becomes messier than expected. 

“Other than becoming a registered OPS, it seems reasonable to expect that Lyka will also be asked to apply for an electronic-money issuer (EMI) license, which is a much more expensive and complicated license to pursue in this country. If their GEMs are supposed to be “as good as cash,” then this will be necessary at some point,” Luis said on Cryptoday.

This article is published on BitPinas: LYKA to Comply With BSP Requirements After Being Ordered to Cease Operating

Source: https://bitpinas.com/fintech/lyka-bsp-update/