The Philippines Securities and Exchange Commission (SEC) has issued a stern warning against cryptocurrency exchange Binance, stating that it has been operating without the necessary approvals or licenses in the country. The regulator’s announcement on November 28, 2023, has raised concerns about Binance’s legality in the Philippines and the potential consequences for those involved in its services.
Unauthorized operations and promotion
The Philippines SEC emphasized that Binance, a prominent global cryptocurrency exchange, is not authorized to sell or offer securities within the country. Under the Philippines’ Securities Regulation Code (SRC), any entity intending to offer securities to the public must register and provide comprehensive information about the securities, including issuance price and their nature.
Binance has been found lacking in this regard, as it is not registered as a corporation in the Philippines and lacks the necessary license and authority to offer securities as defined by the SRC.
Furthermore, the SEC accused Binance of illicitly promoting its services in the Philippines. The regulator cautioned that individuals or entities involved in promoting or trading on the Binance platform may face criminal liability under Section 28 of the SRC.
This offense carries the potential penalties of a fine of up to 5 million Philippine pesos (approximately $90,300) and imprisonment of up to 21 years, or both, as stipulated in Section 73 of the SRC.
Ongoing legal challenges
Despite repeated warnings from authorities, Binance has maintained a significant presence as a cryptocurrency trading platform in the Philippines. Some users have even described its services as “reliable and stable” on social media platforms. However, the recent actions taken by the Philippines SEC are not isolated incidents.
Binance has been facing legal challenges in multiple jurisdictions, including the United States. Binance CEO Changpeng Zhao recently pleaded guilty in a U.S. court to violating U.S. Anti-Money Laundering laws and stepped down as the CEO. This development adds to the growing concerns about the exchange’s global operations.
Implications for Binance in the Philippines
The warning issued by the Philippines SEC raises questions about the future of Binance’s operations in the country. With the SEC’s assertion that Binance lacks the necessary licenses and authorization to offer securities, the exchange may face further regulatory actions that could significantly impact its activities.
Some industry experts suggest that the Philippines SEC’s actions may mirror those of the United States SEC. Binance is currently facing legal proceedings initiated by the U.S. SEC, and a negative outcome in that case could have far-reaching consequences for Binance’s operations worldwide, including the Philippines.
The Philippines has seen a growing interest in cryptocurrency trading in recent years, with a number of local and international exchanges catering to the market. However, the regulatory landscape has been evolving, and the recent actions against Binance highlight the importance of adhering to local regulations.
Cryptocurrency traders and investors in the Philippines are urged to exercise caution and ensure they use platforms that comply with the necessary regulatory requirements. The Philippines SEC recommends using exchanges that are regulated by the Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, such as PDax and Coins.ph, to avoid potential legal complications.
It’s worth noting that in September 2023, the Philippines SEC partnered with the U.S. SEC to jointly combat cryptocurrency fraud. This collaboration underscores the global nature of the cryptocurrency industry and the need for coordinated efforts among regulators to maintain the integrity of financial markets.
