Philippines SEC to ban Binance in 3 months

If the crypto exchange fails to comply, the financial regulator plans to impose a ban and restrict access by the end of February.

During a panel discussion hosted at Coins.ph on December 13, 2023, Kelvin Lee, the Chair of the Philippines Securities and Exchange Commission (PSEC), emphasized that the commission is actively taking measures to block and ban Binance within a span of three months.

Crypto news publication, BitPinas, released a report stating that the panel discussion was organized with the intention of addressing public confusion regarding the matter. This initiative followed the advisory issued by the PSEC, cautioning users about Binance's unregistered exchange status.

"It is supposed to be three months from our issuance date. Three months from November 29. Depending on how feedback is, we can actually extend that, but currently we should feel lucky with the three months,” said Commissioner Kelvin Lee.

The advisory issued by the commission on November 29, 2023, said that the exchange was not authorized to sell or offer securities in the country, given that it was not registered, nor had it tried to register for a VASP (Virtual Asset Service Provider) license from the commission.

"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 PSEC stated.

Exchanges must obtain a Virtual Asset Service Provider (VASP) license in order to facilitate crypto-to-fiat transfers and trades, as well as to manage and safeguard virtual assets. The definition of virtual assets aligns with the existing frameworks set by the Financial Action Task Force (FATF), an international organization responsible for combating money laundering and terrorist financing. As of October 27, 2023, the Philippines is on the FATF’s developing watchlist. There are currently 17 VASPs in the country.

Following the issuance of the advisory on Binance and the discussion about a potential ban, Lee faced criticism. During the panel, Lee confirmed that Google and Meta have responded to the SEC's request to block Binance-related ads within the country.

While detailed information about this pronouncement is limited, it is important to highlight that Google recently implemented significant changes to its advertising policies for cryptocurrencies, coinciding with the imminent approval of a Bitcoin ETF.

"I kept getting asked: why ban Binance when it is cheaper and has more options—of course, they are cheaper because they never bothered to register in the Philippines and bothered to comply. Unlike the registered entities, there is of course compliance costs (that the VASPs have to shoulder),” said Lee.

During November, Binance reached a plea deal worth $4.3 billion with the US Department of Justice to settle money laundering charges. Following this, the former CEO of Binance, Changpeng Zhao, stepped down from his position after pleading guilty.