Leading cryptocurrency exchange Binance has found itself in hot water in the Philippines, where it has been operating without the necessary license. The local securities regulator has warned that this could lead to hefty fines and imprisonment.
The Philippines Securities and Exchange Commission (SEC) issued a warning against Binance on Nov. 28, stating that the firm is not authorized to sell or offer securities in the country without the appropriate license.
The SEC clarified that exchanges like Binance must register and provide detailed information about offered securities before selling them to the public. It added that issuers of these securities should also be registered in the Philippines and obtain a secondary license before offering them to the public.
The regulator further stated that Binance had been unlawfully promoting its services in the country. Entities involved in promoting or trading on Binance could face penalties up to $90,000 and 21 years of imprisonment, the SEC warned.
The SEC also pointed out that operating without a license is a criminal offense under Section 73 of the Securities Regulation Code (SRC). Binance has not yet responded to the allegations.
Why It Matters: The warning from the Philippines SEC is the latest in a series of regulatory hurdles that Binance has encountered globally. As countries worldwide tighten their grip on crypto regulations, Binance’s operations in these jurisdictions could be significantly affected, potentially impacting its global market position. The company might also need to revamp its compliance processes to align with different countries’ regulatory requirements. This incident underscores the increasing importance of regulatory compliance in the rapidly evolving crypto space.