SEC warns public on investing in Binance crypto exchange–group

ADVOCACY group Infrawatch Ph said it has secured a statement from the Securities and Exchange Commission (SEC) cautioning the public against investing on Binance, the world’s largest cryptocurrency exchange.

“Based on our initial assessment, Binance is not a registered corporation or partnership. Consequently, Binance does not possess the necessary authority and or license to solicit investments as only registered corporations can apply for and be issued the necessary licenses to solicit investments,” the SEC’s Enforcement and Investor Protection Department said in a reply to a 12-page letter of the Infrawatch sent to the agency late last month.

Terry L. Ridon, the group’s convenor, said they welcome the significant development, as it provides policy clarity on the position of government on unauthorized and unlicensed cryptocurrency platform operations in the country.

“This advisory provides immediate protection to Binance users who may have lost their money investing in an unlicensed platform. It also provides a way forward on how to ensure greater accountability in the cryptocurrency sector,” Ridon said.

“As more Filipinos participate in this emerging sector, it is the duty of government to ensure that all service providers follow strict regulatory mechanisms and undertake commitments protecting the investing public,” he added.

The SEC’s reply, however, gave more of a template advise not to invest on a firm that is not registered with the agency. It did not yet state what concrete plans it has on curbing the operations of Binance in the Philippines.

Infrawatch’s letter to the SEC quoted newspaper reports that said Binance has some 3.4 million users in the Philippines. The group added Binance Holdings Ltd. has been operating its eponymous exchange in the Philippines sans securing a permit or license from either the SEC and the 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 has no office in the Philippines and only uses third-party companies that employ Filipinos for technical and support services.

Former Finance Secretary Carlos G. Dominguez III also previously warned the public against investing on Binance since it does not have registration records with regulators.