SEC warns public, moves to cut access to Binance

SEC warns public, moves to cut access to Binance

By Revin Mikhael D. Ochave, Reporter

THE Securities and Exchange Commission (SEC) warned the public against investing in Binance as it moved to have the world’s largest cryptocurrency exchange blocked in the country.

In a statement on Wednesday, the SEC said it issued an advisory dated Nov. 28 saying Binance was “not authorized to sell or offer securities to the public in the Philippines, pursuant to Republic Act No. 8799, or the Securities Regulation Code (SRC).” 

The corporate regulator described Binance as a facility for trading financial instruments that also offers investment products such as spot trading using leverage, futures contracts, option contracts, cryptocurrency savings accounts, cryptocurrency staking services, and a platform for initial coin offerings.

The SEC said Binance had been “actively employing” promotional campaigns on social media enticing Filipinos to invest and trade using its platforms. The platform’s app version is available for download on Google Play Store and Apple App Store.

“Based on the commission’s database, the operator of the platform Binance is not registered as a corporation in the Philippines and operates without the necessary license and/or authority to sell or offer any form of securities,” the SEC said.

Aside from the advisory, the SEC said that it would seek assistance from the National Telecommunications Commission and the Department of Information and Communication Technology to block access to Binance in the Philippines within three months after the issuance of the advisory.

The regulator expects the removal of access in the Philippines to take effect within three months after the issuance of the advisory, giving time for Filipino investors who have holdings in Binance to take out their investments and close their positions. 

“This will prohibit users from accessing the website and its applications while inside the country,” the SEC said. 

It added that it sought the help of Google and Meta to prohibit online advertisements of Binance in the Philippines. 

Sought for further comment, SEC Commissioner Kelvin Lester K. Lee said the advisory on Binance is part of the regulator’s efforts to protect the investing public from unregistered trading platforms. 

“Binance, among other platforms, has been the subject of extensive SEC investigations and the findings are quite clear, it is unregistered and yet is operating in the Philippine jurisdiction without the appropriate licenses and registrations,” Mr. Lee said in a Viber message. 

“Moving forward, we intend to flag even more unregistered online platforms, with the intention to remove them from the Philippines and keep our investing public safe,” he added.

Under the SRC, a secondary license with the SEC is needed for entities seeking to conduct the business of buying or selling securities, or as a broker-dealer, or seeking to form or create an exchange for the buying and selling of securities

The SEC said that those who act as salesmen, brokers, dealers, agents, representatives, promoters, recruiters, influences, endorsers, and enablers of Binance might be criminally liable under the SEC and could be penalized up to P5 million or face imprisonment of up to 21 years or both.

Recently, former Binance chief executive officer Changpeng Zhao was ordered by a federal judge to stay in the United States for the time being when he stepped down as the top official of the cryptocurrency exchange after pleading guilty to willfully causing the exchange to fail to maintain an effective anti-money laundering program.