Philippine Investors Take Notice: Binance, OctaFX, MiTrade Banned Soon

The head of the Philippines Securities and Exchange Commission (SEC), Kelvin Lee, has clarified the impending ban on Binance, stating it will come into effect three months after the advisory's issuance.

Scheduled to be enforced within three months of the SEC's advisory release on November 28, the block on Binance in the Philippines allows users time to withdraw their investments from the platform.

Lee provided this clarification during a panel on December 13, aiming to address confusion sparked by the announced ban following Binance's unlicensed operations. The SEC decision stems from regulatory concerns due to Binance's lack of proper registration and authorization within the country.

Highlighting Binance's unauthorized offering of securities in the Philippines under the Securities Regulation Code (SRC) or Republic Act No. 8799, the commission emphasizes its lack of legal authority to conduct such activities.

According to local reports from BitPinas, Lee explained the ban's timeline, initially proposed for as short as one month or even a week. However, to accommodate the Christmas holiday period and minimize inconvenience for Filipino investors, Lee extended the timeframe to three months from the advisory date.

The SEC's actions extend beyond Binance to encompass other unregistered exchanges like OctaFX and MiTrade, facing similar bans within a three-month deadline. The commission is actively monitoring several unregistered exchanges and adopting a “wait-and-see” approach to their compliance post the Binance crackdown.

Addressing criticisms about Binance's cost-effectiveness compared to registered exchanges, Lee points out that Binance's lower costs stem from its non-compliance with local regulations, contrasting them with compliant entities that incur necessary compliance costs.

Lee emphasizes the importance of investing in registered entities for consumer protection, noting the existence of 17 registered virtual asset service providers in the Philippines offering fiat-to-crypto services.

The SEC highlights Binance's active promotion of crypto trading in the Philippines, including via social media, considered an offense under Philippine law.

Furthermore, the SEC's advisory warns that individuals involved as promoters, recruiters, influencers, endorsers, or enablers for Binance in the Philippines, even through online channels, could face criminal liability. Penalties for these offenses could range up to 5 million Philippine Pesos (approximately $90,000) in fines or imprisonment for up to 21 years.

Under Philippine law, entities engaged in buying or selling securities, operating as a broker-dealer, or establishing and managing securities exchanges are mandated to obtain an additional license from the SEC.