The Philippines SEC states that organizations that promote or trade on Binance may be subject to fines of $90,000 and up to 21 years in imprisonment.
The local securities regulator claims that cryptocurrency exchange Binance has been operating in the Philippines without the required authorization or license.
On Nov. 28, the Philippines Securities and Exchange Commission (SEC) warned the public that Binance is not permitted to sell or offer securities in the nation.
The announcement stressed that before offering securities for sale to the general public, an exchange such as Binance must submit an application for registration and supply comprehensive information about the securities being offered. The issuance price, the kind of securities, and other details are included in this kind of detailed information.
Securities issuers must register with the Philippines under the Securities Regulation Code (SRC) prior to making their securities available for purchase. The statement adds that in order to sell or offer securities to the public, the issuer should also obtain a secondary license.
“The operator of the platform Binance is not registered as a corporation in the Philippines and does not possess the requisite license and/or authority to sell or offer any form of securities as defined under Section 3.1 of the SRC, according to the Commission’s database.”
Apart from operating without the requisite license, the SEC contended that Binance had been engaging in the illicit promotion of its services within the nation. The regulator issued a warning that organizations advertising or transacting on Binance might face criminal penalties under Section 28 of the SRC.
According to Section 73 of the SRC, this is a criminal offense that carries a fine of up to 5 million Philippine pesos ($90,300), a 21-year imprisonment sentence, or both.
Some users have described Binance’s local services as “reliable and stable” on social media, suggesting that it has managed to maintain its position as a major cryptocurrency trading platform in the Philippines despite numerous warnings. This was posted three months ago.
Regarding Binance’s legal status, a Reddit user predicted that the Philippine authorities would probably adopt the same regulatory rulings made by the US SEC.
“The US Securities and Exchange Commission is currently suing Binance.” If it loses, every Binance operation in most countries, including the Philippines, will collapse like a house of cards. So, if I were you, I’d invest in BSP-regulated exchanges such as PDax and Coins.ph.”
The announcement comes just days after Binance CEO Changpeng Zhao pled guilty in a US court to violating US anti-money laundering laws and resigned as CEO. In September 2023, the Philippines SEC joined forces with the US SEC to combat cryptocurrency fraud.
The BSP’s warning is a reminder that cryptocurrency exchanges are not immune to regulation. As the cryptocurrency industry continues to grow, regulators around the world are taking a closer look at these companies. Binance is likely to face more regulatory scrutiny in the future, and it is possible that the company will be forced to obtain licenses in more countries.
It is also worth noting that the BSP’s warning is specific to Binance. Other cryptocurrency exchanges may be operating in the Philippines with the necessary licenses. However, it is important for all cryptocurrency users to do their own research and make sure that they are using a reputable exchange that is operating in compliance with local laws and regulations.