The largest cryptocurrency exchange in the world, Binance, is set to face restrictions in the Philippines as the country’s financial regulator plans to block local user access to the platform. The Securities and Exchange Commission (SEC) of the Philippines has expressed concerns about Binance operating without the necessary licenses, leading to potential risks for Filipino investors. In an effort to implement the ban, the SEC has sought assistance from the National Telecommunication Commission (NTC).
The SEC’s decision, outlined in a document dated March 25, reflects the organization’s worries about the security of funds belonging to Filipino investors. Emilio B. Aquino, Chairperson of the SEC, emphasized the need for this action in a letter to the NTC. The SEC has identified Binance’s platform and determined that continued access to its services could jeopardize the safety of investors’ funds.
The primary concern of the SEC revolves around Binance’s offerings of investment products, such as leveraged trading services and crypto savings accounts, which do not comply with the requirements outlined in the Securities Regulation Code. The ban on accessing Binance’s services in the Philippines is scheduled to take effect within three months.
To facilitate a smooth transition for investors, a grace period has been provided, allowing them to exit their positions and move to alternative platforms or investment strategies. Additionally, the SEC has approached major tech companies like Google and Meta (formerly Facebook), requesting them to block Binance-related advertisements for Filipino users on their platforms. This regulatory action in the Philippines adds to the global challenges faced by Binance.
Binance’s CEO, Changpeng “CZ” Zhao, has also faced legal settlements in the United States. In December 2023, a U.S. court ordered Binance to pay $2.7 billion in penalties, with CZ personally directed to pay $150 million as part of the settlement with the Commodity Futures Trading Commission (CFTC). The legal dispute arose from allegations of Binance evading federal laws and operating an illegal derivatives exchange, resulting in a lengthy legal battle and significant financial penalties.
Furthermore, in November 2023, CZ agreed to step down from his role as CEO of Binance as part of a broader settlement with U.S. regulatory authorities, including the Department of Justice, the Treasury Department, and the CFTC. This agreement also involved CZ pleading guilty to various civil charges and one criminal charge related to Anti-Money Laundering (AML) laws. However, CZ’s sentencing for the money laundering charges has been postponed until April 30, and he is currently on bail amounting to $175 million.
The regulatory actions taken by different jurisdictions, such as the Philippines and the United States, highlight the increasing scrutiny and challenges faced by Binance. These developments underscore the importance of regulatory compliance and transparency in the cryptocurrency industry, as authorities worldwide strive to protect investors and ensure stability in the rapidly evolving digital asset landscape.
