October 7, 2022


Global exchange Binance is once again on the regulatory radar, with the Philippine Securities and Exchange Commission (SEC) warning citizens against investing in the exchange.

The agency’s director Oliver O. Leonardo said in the letter: “Based on our initial assessment, Binance is not a registered company or partnership.”

It is also recognized that only registered organizations can apply for and obtain the required permits to solicit investments. The letter is a response to a twelve-page complaint filed last week by Infrawatch PH, a Philippine think tank, calling on the SEC to take action against Binance for non-compliance.

Exchanges are required to comply with RTC rules in the Philippines

Infrawatch PH previously sent a letter to the Bangko Sentral ng Pilipinas (BSP), the country’s central bank, asking for a ban and a ban on Binance from operating in the country for operating without the necessary authorization.

The “Guidelines for Virtual Currency Exchanges” pursuant to Circular No. 944 of 2017, were earlier was released by the BSP which reiterated that VCs do not have legal tender status and are not issued or guaranteed by any government. But also stated, “To be qualified to participate in VC exchange activities, a Certificate of Registration (“COR”) to act as an RTC [Remittance and Transfer Company] must be taken from the BSP.”

And the basic requirements for an RTC include registration, minimum capital requirements, internal audits, regulatory reporting and compliance with the Anti-Money Laundering Act, among other rules.

Meanwhile, the SEC has asked “victims of Binance” to file a notarized complaint with the department, while warning the public not to invest in the platform.

Binance claims to spend $1 billion on compliance efforts

That said, Binance founder and CEO Changpeng Zhao, who is trying to push global expansion without getting pulled over by regulators, recently claimed that the platform has spent more than $1 billion on compliance efforts while denying losing revenue due to stricter Know-Your-Customer (KYC) standards.

The statement comes as Binance prepares launch “Binance Account Bound (BAB), the first Soulbound Token (SBT) based on the BNB smart chain. The platform explained that the token will effectively validate the user’s verified status on Binance after completing KYC and can be used by third-party protocols.

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