Philippines SEC’s Ban on Binance Creates Regulatory Challenges for the Exchange
Last updated:
March 25, 2024 14:17 EDT
| 2 min read
The Philippines Securities and Exchange Commission (SEC) has revealed its plan to block local access to Binance, effectively implementing the Philippines SEC’s ban on Binance. This was contained in a notice published by the financial regulator on March 25.
This decision follows the SEC’s accusation of the exchange’s continuous offering of various investment and trading opportunities to Filipinos without obtaining the necessary license from the commission.
Philippines SEC’s Ban on Binance Urges Google & Meta to Restrict Binance-related Adverts
According to the published media briefing, the Philippines SEC had previously filed a formal request to the National Telecommunication Commission (NTC) on March 12, 2024, to block access to the Binance website, applications, and other web pages used by the exchange.
JUST IN : The Philippine SEC stated that it will continue to block Binance and block citizens’ access to Binance’s main website and related platforms, saying that Binance is a threat to the security of the Philippines.
— Crypto News Updates (@CryptoNewsUpd8s) March 25, 2024
The commission has now deepened its ban on Binance by requesting Google and Meta to block all marketing campaigns related to the crypto exchange in the Philippines.
As stated by the SEC, all previous campaigns and trade offerings were done illegally as the exchange is yet to secure a license from its agency to solicit investment or create/operate an exchange as required by Republic Act No. 8799 or the Securities Regulation Code (SRC).
The regulatory agency had, however, informed residents that the crypto exchange is not authorized to sell or offer securities in the Philippines while also stating that Binance’s continuous crypto promotions may have criminal liability.
The notice read,
“Those who act as salesmen, brokers, dealers or agents, representatives, promoters, recruiters, influencers, endorsers, and enablers of Binance in selling or convincing people to invest in its platform within the Philippines, even through online means, may be held criminally liable under Section 28 of the SRC.”
This ban is expected to be effective within a three-month period – providing ample time for Filipino traders to close their investment positions held on Binance.
Meanwhile, the SEC Chair Emilio B. Aquino has reiterated that the regulatory body believes that Filipinos’ continuous access to Binance websites and associated mobile applications “poses a threat to the security of the funds of investing Filipinos.”
It should be noted this latest move by the Philippines SEC came after issuing a
warning notice
to Binance on November 28, 2023.
The Philippines SEC’s ban on Binance serves as a clear warning to other unregulated exchanges operating within the country, underlining the importance of compliance with local securities laws.
Binance Regulatory Blows Continue
The Philippines SEC’s ban on Binance is not an isolated incident, as the exchange has faced increasing regulatory scrutiny worldwide.
In 2023, the Commodity Futures Trading Commission (CFTC) filed charges against Binance for allegedly operating an illegal digital asset derivatives exchange and evading federal laws.
Similarly, the US Securities and Exchange Commission charged Binance Holdings LTD and ex-CEO Changpeng Zhao (CZ) for allegedly operating unregistered exchanges, broker exchanges, clearing houses, and the unregistered offer and sale of securities.
However, Binance and CZ pleaded guilty to a range of federal charges, including anti-money laundering violations and unlicensed money transmission, on November 21, 2023. This was after a series of investigations by the SEC, the US Department of Justice (DOJ), and the CFTC.
CZ later resigned as the CEO of Binance, which was part of the agreement with the DOJ.
#Binance CEO CZ Steps Down as CEO
As Part Of $4 Billion Settlement With US pic.twitter.com/63nqhU1dPh
— Ahmed CEO (@Ahmedxmtj) November 21, 2023
CFTC announced on December 18, 2023, that the US District Court for the Northern District of Illinois ordered CZ to pay $150 million, and the exchange ruled to pay $2.7 billion to conclude enforcement action.
At press time, CZ is free on a $175 million release bond but awaits court sentence in reaction to his role in Binance money laundering charges.
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