The Philippines Securities and Exchange Commission (SEC) has issued a stern warning, revealing that cryptocurrency exchange Binance has been conducting operations in the country without the requisite approval or license. The SEC’s announcement on November 28 cautioned the public against engaging with Binance, stressing that the exchange lacks authorization to sell or offer securities within the Philippines.
Highlighting the regulatory framework, the SEC emphasized that platforms like Binance must undergo registration and provide comprehensive details about the securities they intend to offer to the public. This information includes the issuance price, the nature of securities, and other pertinent data.
The Securities Regulation Code (SRC) of the Philippines mandates that securities issuers must be registered in the country before making offerings for investment. Additionally, issuers are required to obtain a secondary license to sell or offer securities to the public. The SEC’s database reveals that Binance, as the platform operator, is not registered as a corporation in the Philippines and operates without the necessary license or authority to sell or offer securities, as defined under Section 3.1 of the SRC.
Beyond the absence of the required license, the SEC accuses Binance of unlawfully promoting its services within the country. The regulator warns that entities involved in promoting or trading on Binance may face criminal liability under Section 28 of the SRC. This offense carries severe penalties, including a fine of up to 5 million Philippine pesos ($90,300), imprisonment for 21 years, or both, under Section 73 of the SRC.
Despite prior warnings, Binance has persisted as a major cryptocurrency trading platform in the Philippines, with some users praising its local services as “reliable and stable” on social media just three months ago. However, there are growing concerns, with one Reddit commentator suggesting that the Philippines authorities might follow the lead of the U.S. SEC’s regulatory decisions concerning Binance’s legal status. The commentator stated, “If Binance loses the case with the U.S. SEC, its operations in many countries, including the Philippines, could crumble.”
This development follows Binance CEO Changpeng Zhao’s recent guilty plea in a U.S. court for violating Anti-Money Laundering laws, leading to his resignation. In September 2023, the Philippines SEC collaborated with the U.S. SEC to combat cryptocurrency fraud.