In an official announcement issued on November 28, the Philippine Securities and Exchange Commission (PSEC) warned users that Binance is not a "registered entity" under its current regulatory framework. Citing the United States' recent ruling and position on digital assets, the PSEC also claimed that, by extension, the crypto exchange once helmed by Changpeng Zhao is not authorized to deal in securities.
The PSEC has also asked the country's National Telecommunications Commission (NTC) for assistance to block access to the exchange. This legal action comes after Manila-based thinktank InfrawatchPH called on the PSEC to investigate Binance's dealings in the country last year.
The PSEC emphasized that Binance must first register with the agency and then provide information on securities to users as part of due diligence and compliance procedures before being licensed to operate. The PSEC also argued that Binance has been actively promoting its cryptocurrency services, which would constitute another criminal offense warranting a fine of 5 million Philippine Pesos (roughly $90,000) and even up to 21 years behind bars.
“Those who act as salesmen, brokers, dealers or agents, representatives, promoters, recruiters, influencers, endorsers, and enablers of Binance in selling or convincing people to invest in its platform within the Philippines, even through online means, may be held criminally liable under Section 28 of the Securities Regulation Code," the commission said.
Binance, the world's largest cryptocurrency exchange, has been in very hot water recently with news of its founder and CEO Changpeng Zhao (or CZ) pleading guilty and stepping down after paying a $4 billion bond on Anti-Money Laundering violations and for running an unregistered securities business. This high point in Binance's legal troubles follows the recent conclusion of the FTX debacle, which ended with founder and CEO Sam Bankman-Fried's arrest and conviction.
The Philippines on the other hand, looks to be the latest battleground for regulatory agencies and the nascent crypto sector. Earlier this year, the PSEC called Gemini's Gemini Derivatives a form of security and similarly warned users not to invest in the product.
Traders and investors in the Philippines should keep an eye on new developments, especially regarding the future of cryptocurrency adoption in the country.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
