In a move shaking up the cryptocurrency landscape in the Philippines, the Securities and Exchange Commission (SEC) has set its sights on blocking the world's largest cryptocurrency exchange, Binance.
This action comes hot on the heels of the exchange's former CEO, Changpeng Zhao, pleading guilty to breaching US anti-money laundering laws.
Philippines SEC cracks down on Binance due to licensing issues and money laundering concerns, urging users to withdraw amidst escalating regulatory actions.
Philippines Watchdog Blocks Crypto Exchange Binance
The SEC's decision, disclosed in a statement released on Nov. 28, signals a clampdown on Binance's operations within the Philippines. The commission cited critical reasons for this action, stating that Binance operated in the country without the requisite licenses or authorization to sell securities.
Reuters reports that this move is expected to take effect within the next three months, affording Filipino users a window to extricate their investments from the platform.
The SEC further escalated the measures by urging tech giants Alphabet's Google and Meta, the parent company of Facebook, to block any advertisements from Binance targeting the Philippine market.
Additionally, warnings were issued, cautioning individuals against engaging in transactions or convincing others to invest via the Binance platform, highlighting potential legal consequences.
Binance US Money Laundering Violations
Changpeng Zhao's recent guilty plea looms large in this scenario. The former Binance CEO admitted to willfully allowing the exchange to falter in maintaining an effective anti-money laundering program.
As part of a settlement, Zhao faces a hefty penalty of $50 million, part of a larger $4.3 billion settlement to resolve investigations into Binance's practices.
The regulatory stance against Binance in the Philippines is not without precedence. The SEC had previously cautioned against using the platform, and this recent blockage seems to align with a broader campaign aimed at unlicensed cryptocurrency operators in the country.
However, Binance, under new leadership, seems to acknowledge the SEC's concerns and asserts a commitment to adhering to local regulations. Speaking with Nikkei Asia, a company spokesperson conveyed their stance, affirming their proactive measures to address the SEC's worries.
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Crackdown on Crypto
The SEC's decisive action reflects ongoing efforts to fortify regulatory frameworks governing cryptocurrencies. The commission aims to release comprehensive guidelines for crypto operators in the near future, a move delayed in the wake of the collapse of cryptocurrency exchange FTX.
This month, FTX's founder, Sam Bankman-Fried, faced conviction for seven counts of fraud and conspiracy against customers and investors.
Binance's endeavors to expand into Southeast Asia faced a setback with the ban in the Philippines. Despite the looming block, Filipino users can still access the Binance app through Google and Apple stores, albeit with unclear levels of functionality.
Following the collapse of cryptocurrency exchange FTX, the regulator stated that it hopes to release guidelines on crypto operators this year.
This development underscores the evolving landscape of cryptocurrency regulations globally and the increasing scrutiny faced by major platforms like Binance.
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