PH SEC Warns Against Binance for Unauthorized Operations

MANILA, PHILIPPINES (AP) — The Securities and Exchange Commission (SEC) of the Philippines has issued a recommendation against Binance, a large global cryptocurrency exchange, in a significant regulatory action. This judgment demonstrates the SEC's commitment to ensuring that all financial exchanges in the nation comply with local laws and regulations.

SEC's Actions Against Unauthorized Activities

The Philippines SEC has taken a firm stance against unauthorized financial activities, particularly focusing on cryptocurrency exchanges like Binance. The Commission has clarified that Binance is not authorized to offer or sell securities in the Philippines. Despite its status as a registered broker/dealer overseas, Binance must adhere to the Philippines' specific regulations under the Securities Regulation Code (SRC). These include registering securities with the SEC, operating as a registered corporation or licensed dealer in the Philippines, and possessing a secondary license for public offerings.

Comprehensive Strategy to Block Unauthorized Access

Following the advisory, the SEC plans to work closely with the National Telecommunication Commission (NTC) and the Department of Information and Communications Technology to block access to Binance within the Philippines. This action aims to prevent Filipino users from accessing the website and its applications. Furthermore, the SEC has requested major tech companies like Google and Meta to prohibit online advertisements from Binance from appearing to users in the Philippines.

Acknowledging the impact on Filipino investors, the SEC has indicated a three-month transition period following the advisory issuance. This period allows Filipino investors with holdings in Binance to close their positions and withdraw their investments, ensuring a smoother transition away from the platform.

Crackdown on Unlicensed Exchanges

This development is part of a broader initiative by the SEC to name and crack down on unlicensed exchanges. The Commission's proactive approach aims to protect the public from potentially harmful and unregulated financial activities, particularly in the burgeoning field of cryptocurrency trading.

The SEC has detailed the requirements for compliance under the Securities Regulation Code. These include the need for securities to be registered with the SEC, the issuance of securities by a registered corporation or licensed dealer in the Philippines, and the possession of a secondary license for public offerings.

Public Advisory

The SEC has issued a public advisory, cautioning Filipinos against engaging in investment and trading activities using Binance's platforms. The advisory highlights that Binance has been actively promoting its services on various social media platforms to attract Filipino users.

Binance claims to operate a facility for trading financial instruments and offers various investment products, including spot trading with leverage, futures contracts, option contracts, cryptocurrency savings accounts, staking services, and a platform for initial coin offerings. However, in the Philippines, such activities require compliance with specific regulations which Binance has yet to fulfill.

SEC's Database and Registration Status

According to the SEC's database, Binance is not registered as a company in the Philippines and operates without the appropriate license and/or permission to sell or issue securities. This involves buying or selling securities, acting as a broker or dealer, and forming or maintaining a securities exchange.

Conclusion

The SEC's advice against Binance underscores the SEC's commitment to the integrity of the Philippine financial market. The SEC's goal is to safeguard investors and ensure the stability of the country's financial ecosystem by enforcing rules and guaranteeing compliance. This action sends a strong message to all financial firms existing or proposing to operate in the Philippines: compliance with local rules and laws is non-negotiable.