Infrawatch Urged BSP, SEC Anew on Why It Should Ban Binance, Coinbase

In a new letter sent to the BSP, policy think tank Infrawatch renews its calls to ban Binance amid action from international regulators.

Photo for the Article - Infrawatch Urged BSP, SEC Anew on Why It Should Ban Binance, Coinbase
  • Infrawatch PH urges the BSP anew to ban Binance and also mentioned Coinbase due to charges from U.S. regulators.
  • Infrawatch highlights risks of Binance’s P2P model, suggesting a ban on local banks processing payments to the platform.
  • Infrawatch warns of the Philippines’ ongoing presence on the FATF gray list.

Update – June 26, 2023 at 1:30 pm: Infrawatch has sent BitPinas a new email with its letter address to the Philippine Securities and Exchange Commission. The article has been updated to reflect the matter.

Update: BitPinas has reached out to Binance and Coinbase for comments.

Policy think tank Infrawatch PH has renewed its calls for the Bangko Sentral ng Pilipinas (BSP) and the Philippine Securities and Exchange Commission (SEC) to ban global crypto exchange Binance in the Philippines. In the new letter obtained by BitPinas, the think tank has submitted more information pertaining to its calls to ban Binance, Coinbase, and other unregistered firms. 

Fast Facts

Infrawatch Letter to BSP June 2023
Letter of Infrawatch to the BSP
Photo for the Article - Infrawatch Urged BSP, SEC Anew on Why It Should Ban Binance, Coinbase
Letter of Infrawatch to the SEC

Infrawatch convenor Terry Ridon highlighted the complaint of the U.S. Securities and Exchange Commission (U.S. SEC) against Binance and Coinbase. 

  • In case of Binance, the American regulator charged it with co-mixing of funds and that U.S. residents are allowed to trade on the global platform. 
  • For Coinbase, it was primarily about allowing users to trade tokens it labels as securities. 

Further, Ridon’s letter noted the need for stronger response from the regulators and highlighted several reasons to do so:

  • Ridon said the actions of several jurisdictions vs Binance will provide the regulators with “ample motivation to take stronger action against unregistered VASPs operating in the country.” 
    • VASPs (virtual asset service providers) is an all-encompassing term referring to firms in the business of cryptocurrencies.
    • In addition to U.S. SEC, the U.S. Commodity Futures Trading Commission (CFTC) also charged Binance for violations and insider trading allegations. Binance CEO commented on the charges of the CFTC and U.S. SEC.

Ridon commended the efforts of the BSP and the country’s own SEC:

  • The SEC has acknowledged in a reply letter to Ridon that Binance is not registered in the country.
  • The BSP has issued an advisory for the public to refrain from engaging with unregistered VASPs.
  • The BSP has also suspended all applications for new VASP licenses.

Binance P2P model has risks – Infrawatch

Infrawatch noted that Binance’s peer-to-peer (P2P) model, spot and margin trading, and futures and options trading have risks. 

“This setup (P2P) enables individuals to operate globally while being subject to ZERO regulation compared to licensed cryptocurrency exchanges,” Ridon said, who noted that such activity could lead to increased money laundering activities and local regulators will not be able to scrutinize trading activities on Binance.

In the images shared by Ridon to the BSP, Binance users in the Philippines can choose to do P2P with users abroad. In the image below, Ridon noted how a local Binance user can buy or sell crypto to another party which could be someone not in the Philippines.

Photo for the Article - Infrawatch Urged BSP, SEC Anew on Why It Should Ban Binance, Coinbase

Ridon shared the images below to the BSP where “Binance PH users can also buy USDT with Russian Rubble through BInance P2P, and Binance users can also sell BTC with Russian Rubble through Binance P2P.“

Photo for the Article - Infrawatch Urged BSP, SEC Anew on Why It Should Ban Binance, Coinbase
Image: Infrawatch
Photo for the Article - Infrawatch Urged BSP, SEC Anew on Why It Should Ban Binance, Coinbase
Image: Infrawatch

Infrawatch also noted that Binance enabled local payment options which is “further complicating the situation.” Ridon recommends the SEC and the BSP to prohibit local banks and non-bank financial institutions from processing payments to Binance.

Editor’s note: the BSP’s updated guidelines for VASPs already note that licensed VASPs should only accept transactions with licensed ones. 

Read more: List of firms with both VASP and e-money licenses in the Philippines

Philippines remains on FATF gray list – Ridon

Infrawatch said the Philippines remains on the Financial Action Task Force (FATF) gray list due to the country’s “failure to impose sanctions against illegal operators and our unsatisfactory enforcement of registration requirements.” 

The FATF graylist indicates a country has strategic deficiencies in preventing money laundering and terrorism financing. This listing increases international monitoring and may cause economic sanctions. It also demands the country to rectify these deficiencies under FATF oversight.

“If our regulators continue to exhibit leniency toward entities like Binance, Coinbase, and other unregistered cryptocurrency exchanges, we risk remaining on this list,” Ridon explained.

Binance in the Philippines

Despite unfavorable news abroad, in the Philippines, Binance has been making headways.

This is not the first time Infrawatch asked the BSP to suspend Binance.

  • Infrawatch PH Asks DTI to Suspend and Ban Binance Over Illegal Sales Promotion
  • SEC Cautions Public Not to Invest with Binance, Exchange Says Infrawatch Complaint is Misleading
  • BSP Urged to Ban Binance For Illegally Operating in the Philippines
  • Infrawatch Reports Binance to BSP for Unlicensed Operations Amid Crypto to Bank Feature, Community Meetups

This article is published on BitPinas: Infrawatch Urged BSP Anew on Why It Should Ban Binance, Coinbase

Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.

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  1. F off Infrawatch. Binance can be simply requested not to allow Russian Ruble payments for Philippine registered users if you’re that darn desperate. What you’re requesting is tantamount to harming 90+% of the crypto scene in the Philippines. Get a life.

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