Defense group Infrawatch Ph said it received a filing from the Securities and Exchange Commission (SEC) warning the public against investing in Binance, the world’s largest cryptocurrency exchange.
“Based on our initial assessment, Binance is not a registered corporation or partnership. Consequently, Binance does not have the necessary authority and/or license to raise investments, as only registered corporations can apply for and obtain the necessary licenses to raise investments,” the SEC Department of Enforcement and Investor Protection said in a 12-page letter. An Infrawatch sent to the agency late last month.
Terry L. Readon, team leader, said they welcome the significant development as it provides policy clarity on the government’s position on unauthorized and unlicensed cryptocurrency platform operations in the country.
“This recommendation provides immediate protection to Binance users who may have lost their money by investing in an unlicensed platform. It also provides insight on how to ensure greater accountability in the crypto sector,” Ridon said.
“If more Filipinos participate in this growing sector, the government has an obligation to ensure that all service providers comply with strict regulatory mechanisms and take on obligations to protect investors,” he added.
The SEC response, however, provided more of a template that advised against investing in a firm that was not registered with the agency. He has yet to reveal what specific plans he has for containing Binance’s operations in the Philippines.
Infrawatch’s letter to the SEC cites newspaper reports stating that Binance has about 3.4 million users in the Philippines. The group added Binance Holdings Ltd. operates an exchange of the same name in the Philippines without any authorization or license from either the SEC or Bangko Sentral ng Pilipinas (BSP).
Binance offers products and services such as cryptocurrency exchange, peer-to-peer trading, spot and margin trading, cryptocurrency derivatives such as futures and options, and cryptocurrency loans.
The company does not have an office in the Philippines and only uses third party companies that employ Filipinos for technical and support services.
Former Finance Minister Carlos G. Dominguez III also previously warned the public against investing in Binance as it does not have regulatory registration records.