[Breaking News] Philippines SEC Issues Advisory Against Binance for Unauthorized Operations

Update November 29 at 4:20pm – Binance to cease marketing efforts in the Philippines.

Update November 29, 2023 – from the SEC public information officer:

• In line with the issuance of the advisory, the SEC will be requesting assistance from the National Telecommunication Commission and the Department of Information and Communications Technology to block access to Binance in the Philippines. This will prohibit users from accessing the website and its applications while inside the country.
• The removal of access in the Philippines is expected to take effect within three months after the issuance of the advisory, in order to give Filipino investors who have holdings in Binance to close their positions and take out their investments.
• Additionally, the SEC has requested Google and Meta, the operator of Facebook, to prohibit online advertisements from Binance appearing to users in the Philippines.

In a significant regulatory development, the Philippines Securities and Exchange Commission (SEC) has issued an advisory against the global cryptocurrency exchange, Binance, for operating without proper authorization in the Philippines.

This move comes just after the SEC recently said it will start naming unlicensed exchanges in its advisories going forward, as well as working with the National Telecommunications Commission (NTC) to block access to the exchanges’ websites.

Unauthorized Securities Activities Highlighted

The SEC’s advisory explicitly states that Binance is not authorized to sell or offer securities to the public in the Philippines.

• As per the SEC, despite being a registered broker/dealer overseas, Binance’s activities in the Philippines require adherence to specific regulations under the Securities Regulation Code (SRC). These include:
  • Registration of securities with the SEC
  • Operating as a registered corporation or licensed dealer in the Philippines
  • Possessing a secondary license for public offerings.

To find the list of BSP or Bangko Sentral ng Pilipinas-registered virtual asset service providers, click here.

Active Promotion on Social Media Platforms

The Commission highlighted Binance’s aggressive promotional campaigns on various social media platforms, aimed at attracting Filipinos to invest and trade through its platforms.

These include offerings like spot trading with leverage, futures and option contracts, cryptocurrency savings accounts, staking services, and platforms for initial coin offerings.

Legal Implications for Unregistered Operations

The SEC warned that those acting as salesmen, brokers, dealers, agents, or promoters for Binance within the Philippines could face criminal liability under Section 28 of the SRC. The penalties include a fine of up to five million pesos or imprisonment of up to twenty-one years, or both.

Public Caution Advised

The SEC advises the public to exercise caution before investing in unregistered online investment platforms like Binance. This advisory aligns with the Commission’s previous warnings against dealing with non-registered foreign entities.

BitPinas Interview with SEC Commissioner Provides Context

In a recent interview at the YGG Web3 Games Summit, conducted by this writer, Commissioner Kelvin Lee mentioned the SEC’s next steps, including partnership with the NTC to block unregistered entities and the development of the Digital Asset Security Service Provider Rules.

“We will keep coming up with advisories and we’re moving forward to shut down with the NTC some of those entities that are named in the advisories, precisely because we don’t want you to operate here If you’re not registered.”

Kelvin Lee, Commissioner, SEC

This is the first time the SEC named Binance in its advisory vs unregistered exchanges. Previously, Infrawatch convenor Terry Ridon published a letter sent to him by the SEC confirming that Binance is not registered in the country. This is in response to his inquiry to the Commission and the Bangko Sentral ng Pilipinas (BSP) to ban Binance from operating in the country.

Recent Binance News: Binance Pleads Guilty

Recently, Binance has admitted to breaching the U.S. Bank Secrecy Act (BSA). As a result, Binance is set to pay a substantial penalty of $4.3 billion, marking one of the most sizeable fines ever levied against a corporate entity.

This is a developing story: Philippines SEC Issues Advisory Against Binance for Unauthorized Operations

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