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Philippines SEC prepares to ban Binance in three months

The financial regulator will ban and block the crypto exchange by late February if it does not comply.

Philippines SEC prepares to ban Binance in three months

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The Philippines Securities and Exchange Commission (PSEC) chair Kelvin Lee clarified in a panel hosted at on December 13, 2023, that the commission is preparing necessary steps to block and ban Binance in the country within three months.

According to a report from BitPinas, a Philippines-based crypto news publication, the panel was organized to clarify public confusion on the matter. This comes after the PSEC issued an advisory warning users about Binance’s current status as an unregistered exchange.

“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.

A VASP license is required for exchanges to process crypto-to-fiat transfers and trades alongside management and custody of virtual assets. The definition of virtual assets follows current frameworks set by the Financial Action Task Force (FATF), a global money laundering and terrorist financing watchdog. As of October 27, 2023, the Philippines is on the FATF’s developing watchlist. There are currently 17 VASPs in the country.

Lee received criticism after the commission issued the advisory on Binance and discussed the prospect of a ban. In the panel, Lee confirmed that Google and Meta have responded to the SEC’s request to block Binance-related ads in the country. The details on this pronouncement are scarce, but it’s worth noting that Google recently made crucial changes to its advertising policies for crypto, prior to 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.

In November, Binance entered into a $4.3 billion plea deal with the US Department of Justice for money laundering indictments. Binance ex-CEO Changpeng Zhao has since stepped down after pleading guilty.

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