Good day everyone,

I hope you are all well and had an excellent week, welcome to CryptoGod-1’s blog on all things crypto. In this post I will be looking at the latest issues emerging around Binance following their $4.3 Billion settlement with the United State DOJ.

Binance Struggles in Asia

The Securities and Exchange Commission in the Philippines has issued a warning to users that the world's leading cryptocurrency exchange, Binance, is operating within the nation without the required license. This was announced in a press release on the 28th of November 2023 in which the regulator noted how the exchange lacks authorization to sell securities to the public in the Philippines. They went on to add that users should exercise caution when considering making use of said exchange.

“Based on the Commission’s database, the operator of the platform BINANCE is NOT REGISTERED as a corporation in the Philippines and OPERATES WITHOUT THE NECESSARY LICENSE AND/OR AUTHORITY to sell or offer any form of securities as defined under Section 3.1 of the Securities Regulation Code (SRC), to engage in the business of buying or selling securities” 

The Commission went on to note that from their primary investigations into Binance has revealed the exchange conducted several promotional campaigns on social media to attract Filipinos to invest and trade securities or other assets on the platform. The regulators noted that the website of the exchange stated its ability to facilitate trades among a wide range of products including spot leveraged trading, options, and derivatives. While this may be registered in other jurisdictions, Binance is lacking the correcting standing in the Philippines to offer such products.

The global exchange cannot establish and operate its offering of services to local markets, and the SEC has urged users to exercise full caution before making any exposure to “unregistered online investment platforms.” The regulatory body also warned individuals and entities who aid the company in its operations throughout the Philippines will be liable to twenty-one years in prison, five million pesos, or both.

“…those who act as salesmen, brokers, dealers or agents, representatives, promoters, recruiters, influencers, endorsers, and enablers of the BINANCE platform in selling or convincing people to invest in this platform within the Philippines even through online means may be held criminally liable under Section 28 of the SRC and be penalized with a maximum fine of Five Million Pesos (P 5,000,000.00) or imprisonment of Twenty One (21) years or both.” 

Investment products can only be sold in the country if the securities offered to the public have been registered with the SEC. This requires a written filed application which must include all the relevant information attached, while the issuer must be a licensed dealer registered in the Philippines and must possess a secondary license to trade securities.

The exchange is also facing challenges in Thailand as Binance plans to launch a new crypto platform with billionaire Sarath Ratanavadi’s Gulf Energy. It has been noted that Gulf Energy holds a 51% stake in the planned crypto exchange, while Binance holds the minority stake. Following the announcement of CEO Changpeng Zhao’s guilty plea and him stepping down to be replaced by Richard Teng, former chief executive of the Abu Dhabi Global Market, the exchange is facing rising challenges from regulators. 

Sarath Ratanavadi noted that there were no accusations of fraud or misappropriating customer assets in the US settlement, which will see the exchange pay a $4.3 billion settlement with the US authorities. Ratanavadi stated:

“Binance grew extremely fast and so probably crossed paths with some regulations. We have much more confidence in its credibility after this storm, which should make it a lot stronger.”

The Binance-Gulf Energy joint venture will likely be forced to delay its launch following the recent scrutiny. Thailand’s regulator Securities & Exchange Commission is “very strict” according to Ratanavadi and have asked plenty of questions regarding Binance prior to approval. He noted that his firm chose Binance due to its market-leading position.

In the wake of all that has happened at Binance over the previous week, this is more news they would have hoped to avoid. Of course the exchange will press ahead with their plans and look to ride through the storm, but certainly things look likely to remain difficult for Binance in the foreseeable future.

Have a great day,

Peace. CryptoGod-1.

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