Regulators around the world have been giving Binance a tough time recently, most notably in the United States, where the Securities And Exchange Commission (SEC) continues to look for new evidence to support its lawsuit against the crypto exchange.
But the U.S. isn’t the only country where Binance is in hot water. In the firm’s latest regulatory challenge, the SEC of the Philippines has advised people not to use the platform, which it accuses of operating an unlicensed securities exchange.
Like its American counterpart, the Philippines SEC maintains that cryptocurrencies should be considered securities and that crypto exchanges should require its permission to offer their services.
In a statement on Tuesday, November 28, the regulator observed that although Binance may be licensed elsewhere, it remains unregistered in the Philippines. It therefore advised Filipinos against investing through the platform.
The regulator especially took issue with Binance’s promotional efforts in the country. It cautioned that anyone who promotes or endorses the platform could face a fine of up to 5M pesos or a maximum prison sentence of 21 years.
According to local news , the SEC has asked communications regulators to block anyone in the Philippines from accessing the Binance website or app. Citing the need to give investors time to withdraw their assets from the platform, the anticipated ban won’t come into force for three months, the agency said.
The Filippino regulator’s latest enforcement action will likely induce deja vu among anyone familiar with the predicament in which many American crypto exchanges currently find themselves.
In both countries, the respective SECs’ insistence that cryptocurrencies are securities makes offering or facilitating their sale nigh on impossible within the existing legal framework.
Originally draughted for investment products issued by centralized entities, securities legislation in the US and the Philippines requires that exchanges identify a registered issuer behind each asset on offer – easy enough for shares, but illogical in the context of decentralized finance (DeFi).
Although the Philippines has plenty of homegrown exchanges that could step up to fill the hole left by Binance, in the absence of a proper licensing regime, what’s to stop the SEC from coming after them too?