Philippines’ Securities Regulator Cautions Public Against Binance After 12-Page Complaint

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In Brief
  • Philippines’ Securities and Exchange Commission (SEC) has warned citizens against investment with Binance.

  • The agency acknowledged that Binance is not a registered corporation or partnership in the country.

  • The letter is a response to a twelve-page complaint filed last week by Infrawatch PH.

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Global exchange Binance is again under the regulator’s radar, with the Philippines’ Securities and Exchange Commission (SEC) warning citizens against investment with the exchange.

The agency’s director Oliver O. Leonardo stated in the letter, “Based on our initial assessment, Binance is not a registered corporation or partnership.”

It is further acknowledged that only registered organizations are eligible to apply for and receive the requisite licenses to solicit investments. The letter is a response to a twelve-page complaint filed last week by Infrawatch PH, a Filipino think tank, that urged that the SEC take action against Binance for non-compliance.

Exchanges are required to comply with RTC rules in Philippines

Infrawatch PH had previously sent a letter to the Bangko Sentral ng Pilipinas (BSP), the country’s central bank, seeking that Binance is banned and barred from doing business in the country for operating without the necessary authorization.

The “Guidelines for Virtual Currency Exchanges” under 2017 Circular No. 944, was earlier released by BSP that reiterated that VCs do not have legal tender status and are neither issued nor guaranteed by any government. But, it also stated, “To be qualified to engage in VC exchange activities, a Certificate of Registration (“COR”) to operate as an RTC [Remittance and Transfer Company] must be obtained from the BSP.”

And the basic requirements for an RTC include registration, minimum capital requirements, internal controls, regulatory reports and compliance with the Anti-Money Laundering Act, among other rules.

Meanwhile, the SEC has asked the ‘victims of Binance’ to file a notarized complaint with the department while cautioning the public not to invest with the platform.

Binance claims spending $1bn on compliance efforts

That said, Changpeng Zhao, founder, and CEO of Binance, who is trying to push global expansion without being pulled up by regulators, recently claimed that the platform spent more than $1 billion on compliance efforts while denying losing revenue due to stricter know-your-customer (KYC) norms.

The statement comes as Binance is preparing to launch ‘Binance Account Bound (BAB), the first Soulbound Token (SBT) built on the BNB Smart Chain. The platform explained that the token will effectively validate the user’s verified status on Binance upon completion of KYC and will be usable by third-party protocols.

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Shraddha is an India-based journalist who worked in business and financial news before diving into the crypto space. As an investment enthusiast, she has also has a keen interest in understanding crypto from a personal finance standpoint.

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