Philippine SEC Accuses Binance of Operating Without License, Warns Citizens of Violations

The Philippines’s Securities and Exchange Commission (SEC) has accused Binance of operating in the country without the necessary approval or license.

In a notice issued to the public on November 28, 2023, the regulator warned citizens to exercise caution before using the platform as it violates crucial rules guiding securities issuance in the country.

The Philippine securities regulator pointed out that Binance violates the country’s Securities Regulation Code. The code requires that issuers register securities and investment products sold or offered to the public. Additionally, the issuer must possess a secondary license to sell or offer securities to the public.

The SEC’s notice states,

“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 as defined under Section 3.1 of the SRC.”

Though it acknowledged that Binance might be regulatory compliant in other territories, the regulator claims these rules apply even if the issuers are registered outside the country.

The Philippine SEC also alleges that Binance has unlawfully promoted its services in the country without the required license. It warns that entities promoting or trading on Binance could face criminal liability under Section 28 of the SRC. According to the regulator’s statement, under Section 73 of the SRC, committing this offence is punishable by a fine of up to 5 million Philippine pesos ($90,300), a prison term of 21 years, or both.

This development follows Binance’s recent settlement deal with the United States Department of Justice, in which the exchange agreed to pay over $4.3 billion in fines, and led to its co-founder, Changpeng Zhao, stepping down as CEO.

However, Richard Teng, the new CEO of the exchange, has promised to make the exchange more regulatory compliant and take it on a new chapter of growth. These allegations by the Philippine SEC might be the first test of his resolve.

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