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MAR 26, 2024

Philippines follows through on Binance ban

by CoinNess Global

The Philippines' financial regulator announced that it is implementing what amounts to a ban on Binance in the Southeast Asian nation by blocking local access to the leading global cryptocurrency exchange.
This decision, publicized via a press release on March 25, comes as the Securities and Exchange Commission (SEC) raised concerns last November over Binance's operations in the country, citing a lack of necessary licenses for certain investment products.
According to the press release, the SEC revealed that it sought assistance from the National Telecommunication Commission (NTC) to enforce the ban, expressing worries about the security of Filipino investors' funds on the platform.
In a letter addressed to the NTC, SEC Chairman Emilio Aquino stated:"The SEC has identified the aforementioned platform and concluded that the public's continued access to these websites/apps poses a threat to the security of the funds of investing Filipinos.”
A similar move was taken last December by the Financial Intelligence Unit (FIU) in India, as it acted to block access to what it deemed to be non-compliant global crypto exchanges.

Unlicensed services

The SEC alleges that Binance offers services like leveraged trading and crypto savings accounts without the required licenses, violating the country's Securities Regulation Code. Consequently, the ban is set to be implemented within three months, allowing investors time to exit their positions held through Binance.
Furthermore, the SEC has requested Google and Meta to restrict Binance-related advertisements targeted at Filipino users on their platforms, extending the regulatory measures to online advertising as well. A similar stance was taken by authorities in Thailand last August with the Ministry of Digital Economy and Society (MDES) engaging in talks with Facebook in an effort to curb questionable crypto-related advertising on the platform.

Regulatory setback

This move by the Philippines' financial watchdog marks another regulatory setback for Binance, which has faced increasing scrutiny globally. In December 2023, a U.S. court ordered Binance to pay significant fines to the Commodity Futures Trading Commission (CFTC) for evading federal law and operating an illegal derivatives exchange.
As part of the settlement, Binance's former CEO, Changpeng Zhao (CZ), agreed to step down from his position, with Zhao also facing civil and criminal charges related to anti-money laundering laws.
The SEC's cautionary stance against Binance dates back to November 2023, shortly after Zhao's legal troubles in the U.S. emerged. At that time, the SEC expressed its intention to ban Binance in the Philippines, though the execution was postponed due to changes in the leadership of the regulatory body.
Notably, Kenneth Stern, who headed up Binance's operations in the Philippines, exited the company in July 2023, amidst mounting regulatory pressures and legal challenges. Binance had seen many leading executives part ways with it in the lead-up to the company’s settlement with the U.S. Department of Justice (DoJ) last year.
With regulatory actions tightening around Binance globally, the future of the exchange in various jurisdictions remains uncertain. The ban in the Philippines adds to the ongoing regulatory challenges faced by the company and underscores the growing importance of compliance within the cryptocurrency industry.
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