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Binance faces potential ban in the Philippines

source-logo  cryptopolitan.com 22 February 2024 07:23, UTC

In late November, Philippine financial regulators issued a notice to Binance, the world’s largest cryptocurrency exchange, stating that it was operating in the country without a proper license. They emphasized that Binance was not authorized to sell or offer securities in the Philippines, cautioning citizens against using the platform. The regulators set a deadline: if Binance didn’t rectify the issue by the end of February, they would block its operations.

Binance face deadline in Philippines notice

As the deadline approaches, the Securities and Exchange Commission (SEC) of the Philippines is evaluating the potential consequences of banning Binance. This includes considerations about the funds of Filipino accountholders. A spokesperson for the SEC mentioned that they are collaborating with other government agencies to establish the procedure for restraining the operations of unregistered entities in the Philippines.

Despite the looming deadline, the exchange has not publicly addressed the regulatory concerns. This lack of communication has left the Filipino crypto community uncertain about whether the SEC will follow through with its vow to block Binance or grant the exchange an extension. Luis Buenaventura, an assistant vice president at GCash and co-founder of BloomX, a crypto exchange platform in the Philippines, expressed frustration at the lack of clarity from the SEC.

This potential action against the exchange adds to a turbulent period for the exchange. In November, Binance made a historic guilty plea in the United States, admitting to violating banking laws and agreeing to pay $4.3 billion in penalties. Following this, Binance appointed a new CEO, Richard Teng, to replace co-founder Changpeng Zhao, who also pleaded guilty to violating US banking laws.

Teng pledged to enhance compliance with regulations globally. However, the situation in the Philippines emerged as a significant test for the exchange under its new leadership. So far, the exchange has not addressed the specific issues cited by Philippine regulators. The SEC faulted Binance for employing various individuals and entities to promote the exchange, warning them of severe penalties if they continued to do so.

Uncertainty and potential impact

Additionally, the agency requested tech giants like Google and Meta to cease displaying Binance advertisements to Filipino users. Kelvin Lee, the head of the SEC, indicated in December that a ban on the exchange would take effect three months after the advisory was issued on November 29, but did not rule out the possibility of an extension.

If the ban materializes, the Filipino crypto community anticipates its impact around February 29. Some individuals, like lawyer Rafael Padilla, have argued that authorities cannot ban the exchange without a court order. However, there has been no new communication from the SEC or the National Telecommunications Commission regarding the potential ban.

Binance’s entry into the Philippines in 2019 was transformative for the local crypto landscape. BloomX, as the first vendor on its peer-to-peer platform in the Philippines, recorded $1 million in trades. Binance’s platform offered significantly lower transaction fees compared to local exchanges, fostering a high demand for well-priced crypto trades among Filipino users.

The unresolved regulatory issues between Binance and Philippine authorities have cast uncertainty over the future of the exchange’s operations in the country. With the deadline fast approaching, stakeholders await further developments from both Binance and regulatory agencies to clarify the situation and its potential implications for the Filipino crypto community.