The Philippines Securities and Exchange Commission (SEC) has issued a stern warning against cryptocurrency exchange giant Binance, asserting that the platform has been operating in the country without the requisite approvals or licenses.
The regulatory body’s announcement, dated November 28, disclosed that Binance lacks authorization to sell or offer securities within the Philippines.
According to the SEC’s statement, Binance, like any other exchange, is obligated to undergo registration and provide comprehensive details about the securities it offers to the public.
This information encompasses aspects such as issuance prices, the nature of the securities, and other pertinent data.
The Philippines’ Securities Regulation Code (SRC) mandates that securities issuers be registered within the country before being made available for investment.
Additionally, they are required to secure a secondary license for selling or offering securities to the public.
The SEC’s database revealed that Binance, the platform operator, is not registered as a corporation in the Philippines and operates without the essential license or authority to distribute any form of securities, as stipulated by Section 3.1 of the SRC.
In addition to operating without the necessary license, the SEC accused Binance of unlawfully promoting its services within the Philippines.
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The regulator cautioned that entities involved in promoting or trading on Binance could face criminal liability under Section 28 of the SRC.
This criminal offense carries severe penalties, including fines of up to 5 million Philippine pesos (approximately $90,300) or imprisonment of up to 21 years, or both, as stipulated in Section 73 of the SRC.
Despite prior warnings, Binance has apparently continued to be a prominent cryptocurrency trading platform in the Philippines. Some users had previously praised its local services as “reliable and stable” on social media platforms.
Interestingly, a Reddit commentator speculated that the Philippines authorities might follow the regulatory decisions of the United States SEC concerning Binance’s legal status.
Binance was facing legal action by the U.S. SEC at the time, and if it lost the case, it could potentially impact its operations in various countries, including the Philippines.
Notably, this development comes shortly after Binance’s CEO, Changpeng Zhao, pled guilty in a U.S. court for violating U.S. Anti-Money Laundering laws and subsequently stepped down from his position.
Moreover, in September 2023, the Philippines SEC had entered into a partnership with the U.S. SEC to jointly combat cryptocurrency-related fraud.
At the time of reporting, neither Binance nor the Philippines SEC had responded to requests for comment from Cointelegraph.
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