Philippines Regulators Threatens to Suspend Binance Operation Due to Non-Compliance
As legal peril faces the world’s largest crypto exchange by daily trading volume, Binance’s mounts the regulators across the globe have engaged in a thorough exercise to assess the compliance level of the firm.
In a recent publication, the Philippines regulators confirmed that Binance has operated in the region without a license. Despite Binance cementing a solid market in the Philippines, the regulators claimed that the controversial crypto exchange failed to comply with the licensing requirements in the region.
Binance Hit By New Lawsuit in Philippines
Following the revelation of Binance’s non-conformity in the Philippines, the Securities and Exchange Commission (SEC) took decisive action to warn the public to shun doing business with the troubled crypto exchange. In the report, the SEC confirmed that Binance was not legally allowed to offer securities to Philippine crypto investors.
Citing section 28 of the Securities Regulation Code (SRC) in the Philippines, the SEC stressed that Binance should register with the relevant authorities to facilitate the buying and selling of securities.
During the proposed registration process, the crypto exchange should clearly describe the securities to allow the regulators to assess their conformance with the law. The regulators confirmed that during the registration process, the crypto exchange should outline the issuance price, features of the securities, and other product details.
The SEC restated that no securities broker or dealer can operate without registration in the Philippines. The regulators argued that after the registration process, the interested entity should obtain a secondary license from the regulators.
A review of the SEC database demonstrated that the Binance does not appear on the list of registered crypto exchanges. The commission stated that the embattled crypto exchange was neither registered as a corporation nor a securities issuer in the Philippines.
Filipino Regulators Set to Punish Non-Compliant Crypto Firms
Also, the regulators noted that Binance has operated without a license, breaching section 3.1 of the SRC. In a recent report, the number of crypto-savvy Filipinos reached 4.13 million.
The study illustrated that most Filipinos invest in major crypto assets such as Bitcoin (BTC), Ether (ETH), and Binance USD to generate profits. With the growing interest in crypto investment, Binance has gained a significant market share in the Philippines.
In a recent interview, some of the respondents described Binance services and products as reliable and stable compared to those offered on local exchanges. Despite offering industry-leading crypto assets, the SEC noted that the Binance team engaged in the unlawful promotion of its products to gain a competitive advantage.
The regulators regretted that the disgraced crypto exchange marketing approach contravened section 28 of the SRC, and hence, any entity or individual promoting the Binance products will face legal charges.
Philippines Embraces Stricter Crypto Regulations
Guided by the existing regulation levied on digital assets, the regulators highlighted the criminal charges against non-compliant firms. Firstly, the commission stated that violation of SRC could lead to high fines totaling around $90,300 or more than 20 years of imprisonment.
The punishment of non-compliant firms is captured under section 73 of the SRC. The Philippine regulatory action on Binance has become a center of discussion on most social media platforms.
In a Reddit post, one of the users condemned the Filipino regulators for replicating the legal action taken by the US against Binance. He regretted that if the US win over Binance in the imminent criminal trials, then most regional offices will be at the edge of closure.
In response to the legal action, the Binance team told a local news outlet that the crypto exchange was committed to complying with the Philippine regulations. The Binance team affirmed that with the current leadership of Richard Teng, the crypto exchange will take strategic actions to address the SEC concerns.
News concerning Binance’s non-compliance with the Philippines regulation came days after the crypto exchange agreed to settle a $4.3 billion penalty for violating the US regulations.
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