Economy · August 4, 2022

SEC warns the public to invest in cryptocurrency exchange group Binance

ADVOCACY Infrawatch Ph group said it has obtained a statement from the Securities and Exchange Commission (SEC) warning the public against investing in Binance, the largest cryptocurrency exchange in the world.

“Based on our initial assessment, Binance is not a registered company or a partnership. As a result, Binance does not possess the necessary authority and / or license to solicit investments as only registered companies can apply for and obtain the necessary licenses to solicit investments, “said the SEC’s Investor Protection and Enforcement Department. in a response to a 12-page Infrawatch letter sent to the agency late last month.

Terry L. Ridon, the coordinator of the group, said he welcomes the significant development, as it provides political clarity on the government’s position on unauthorized and unlicensed cryptocurrency platform operations in the country.

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

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

The SEC response, however, provided more than one model to advise against investing in a company that is not registered with the agency. He has not yet stated what concrete plans he has to curb Binance’s operations in the Philippines.

Infrawatch’s letter to the SEC cited newspaper reports that Binance has approximately 3.4 million users in the Philippines. The group added Binance Holdings Ltd. operated its namesake exchange in the Philippines without securing a permit or license from the SEC and Bangkok 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 offices in the Philippines and only uses third party companies that employ Filipinos for technical and support services.

Former Finance Secretary Carlos G. Dominguez III has also previously warned the public against investing in Binance as he has no registration records with regulators.