Philippines SEC Tightens Grip on Cryptocurrency Market, Targets Binance for Regulatory Non-Compliance
- Philippines’ Securities and Exchange Commission (SEC) has initiated steps to block access to Binance, citing the platform’s lack of registration as a corporation and the absence of a necessary license to offer securities in the country.
- The SEC set a three-month grace period for Filipino Binance users to close their positions and withdraw investments, with the block expected to take effect after this period.
- The SEC has also called for cooperation from tech giants like Google and Meta to cease online advertisements of Binance in the Philippines, intensifying efforts to regulate the cryptocurrency market and protect investors.
The Philippines’ Securities and Exchange Commission (SEC) has initiated steps to block access to Binance, showing the increasing scrutiny of crypto platforms by regulatory bodies worldwide.
This development comes amid a series of events and regulatory concerns that have raised questions about Binance’s operations and compliance with local laws in the Philippines.
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Philippines’ SEC and Binance
Binance, known for offering various investment products such as spot trading with leverage, futures contracts, and cryptocurrency staking services, has been operating in the Philippines without being registered as a corporation. This lack of registration and a necessary license to offer securities have prompted the SEC to act. The regulator’s advisory states that Binance is not authorized to sell or offer any form of securities in the Philippines, as defined under Section 3.1 of the Securities Regulation Code (SRC).
The SEC’s directive has significant implications for Binance and those associated with promoting its services in the Philippines. The advisory warns that individuals acting as promoters, influencers, or agents for Binance could face criminal liability under Section 28 of the SRC, including penalties of up to 5 million Philippine Pesos or imprisonment for up to 21 years.
Timeline for Blocking Access
To mitigate the impact on Filipino investors, the SEC has provided a three-month window from the issuance of its advisory (dated November 28, 2023) for users to withdraw their investments from Binance. This decision to block access to Binance is expected to take effect after this period, allowing investors sufficient time to liquidate their positions.
The SEC is not acting alone in this endeavor. It has sought the cooperation of the National Telecommunications Commission and the Department of Information and Communications Technology to enforce the block. Additionally, major tech platforms like Google and Meta have been requested to halt online advertisements of Binance in the Philippines, further limiting the exchange’s reach to Filipino users.
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Leadership Changes at Binance
This regulatory action coincides with significant changes within Binance’s leadership. Changpeng Zhao, the former CEO, stepped down following his guilty plea to violating US anti-money laundering laws. In the wake of these developments, Binance appointed Richard Teng as the new CEO, who now faces the challenges of navigating through intensive monitoring by US financial authorities and maintaining the company’s position in the crypto sector.
In response to the SEC’s actions, Binance has expressed its commitment to complying with local regulations and addressing the concerns raised. The company has stated its intention to align with Philippine laws and take proactive steps under the new leadership. This situation indicates the evolving regulatory landscape in the crypto world and the need for exchanges like Binance to adapt to diverse legal frameworks across different countries.
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