Philippines to ban Binance, OctaFX and MiTrade in three months
Kelvin Lee, the head of the Philippines Securities and Exchange Commission (SEC), has provided clarity on the impending ban of Binance, stating that it will take effect three months after the issuance of an advisory.
The block on Binance’s access in the Philippines is set to take effect within three months from the release date of SEC’s advisory on November 28, giving Filipino users time to withdraw their investments from the exchange.
The clarification came during a panel on December 13, following confusion surrounding the ban announced after Binance was found operating without a license. The SEC is moving to block access to Binance due to regulatory concerns, citing the platform’s operation without proper registration and authorization in the country.
The commission warned that Binance was “not authorized to sell or offer securities to the public in the Philippines, pursuant to Republic Act No. 8799, or The Securities Regulation Code (SRC).”
According to local news outlet BitPinas, Lee explained that the ban’s timeline was set for three months from the advisory date. Initially, the recommendation for the ban was as short as one month or even a one-week transition period. However, Lee extended the timeframe to accommodate the Christmas holiday period, aiming to minimize inconvenience for Filipino investors.
The advisory and subsequent ban aren’t exclusive to Binance. Other exchanges, including OctaFX and MiTrade, which have also been operating without registration, face similar bans after a three-month deadline. The Philippines SEC is reportedly monitoring a long list of unregistered exchanges, adopting a “wait-and-see” approach to see if these entities will register following the action against Binance.
Lee also addressed criticisms surrounding the ban on Binance, particularly comments about its cost-effectiveness compared to registered exchanges. He argues that Binance’s lower costs could be attributed to its lack of registration and non-compliance with local regulations, unlike fully compliant registered entities that incur compliance costs.
Lee reiterated that investing in registered entities is crucial for consumer protection, noting that there are currently 17 virtual asset service providers registered in the Philippines that offer fiat-to-crypto services.
The SEC highlighted that Binance has been actively promoting crypto trading to Filipinos, including through social media, which is considered an offense under Philippine law.
In its advisory, the SEC warned that individuals acting as promoters, recruiters, influencers, endorsers, or enablers for Binance in the Philippines, even through online channels, could face criminal liability. The penalties for these offenses could include fines up to 5 million Philippine Pesos (roughly $90,000) or imprisonment for up to 21 years.
Philippines’ local laws mandate that entities seeking to participate in activities involving buying or selling securities, functioning as a broker-dealer, or establishing and managing a securities exchange must obtain an additional license from the SEC.