Cryptocurrency exchange Binance has been operating in the Philippines without the necessary approval or license, according to the local securities regulator.
The Philippines Securities and Exchange Commission (SEC) issued a warning against Binance on Nov. 28, informing the public that the exchange is not authorized to sell or offer securities in the country.
The announcement emphasized that an exchange like Binance must apply for registration and provide detailed information about offered securities before selling them to the public. Such detailed information includes the issuance price, the nature of securities and other data.
The Philippines’ Securities Regulation Code (SRC) also requires securities issuers to be registered in the country before being offered for investment. The issuer should also acquire a secondary license to sell or offer securities to the public, the statement notes, adding:
“Based on the Commission’s database, the operator of the platform Binance is not registered as a corporation in the Philippines and operates without the necessary license and/or authority to sell or offer any form of securities as defined under Section 3.1 of the SRC.”
In addition to operating without the necessary license, the SEC argued that Binance had been illicitly promoting its services in the country. The regulator warned entities involved in promoting or trading on Binance may be held criminally liable under Section 28 of the SRC.
This is a criminal offense that carries the penalty of a fine of up to 5 million Philippine pesos ($90,300), or imprisonment of 21 years, or both, under Section 73 of the SRC, the statement notes.
In an accompanying statement to the press, the SEC added it will be requesting assistance from the National Telecommunication Commission and the Department of Information and
“This will prohibit users from accessing the website and its applications while inside the country.”
The SEC has also requested Google and Meta, the operator of Facebook, to prohibit online advertisements from Binance appearing to users in the Philippines, it said.
Despite multiple warnings, Binance has apparently remained one of major crypto trading platforms in the Philippines, with some users describing its local services as “reliable and stable” on social media three months ago.
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One Reddit commentator noted that the Philippines authorities were likely to copy the regulatory decisions by the United States SEC regarding Binance’s legal status, stating:
“Binance is currently being sued by the U.S. SEC. If it loses in that case, every Binance operation in most countries, including the Philippines, would crumble like a house of cards. So if I were you trade on BSP-regulated exchanges like PDax and Coins.ph.”
The news comes a few days after Binance CEO Changpeng Zhao pleaded guilty in a U.S. court to violating U.S. Anti-Money Laundering laws and stepped down as the CEO. In September 2023, the Philippines SEC partnered the U.S. SEC to combat crypto fraud.
Binance and the Philippines SEC did not immediately respond to Cointelegraph’s request for comment.
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Update (Nov. 30, 5:09 am UTC): Added additional information about the SEC requesting telecommunication and advertising blocks against Binance.
