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In a recent development concerning cryptocurrency regulation, the Philippines Securities and Exchange Commission (SEC) has provided clarity on the timeline for the impending ban on Binance, one of the world’s largest cryptocurrency exchanges. During a panel discussion on December 13, Kelvin Lee, who heads the Philippines SEC, disclosed that the ban, initially issued as an advisory on November 28, will officially come into effect three months after the advisory’s issuance date.
This announcement comes in the wake of widespread confusion and speculation about the regulatory actions taken against Binance, which has been accused of operating without a valid license in the Philippines. As the countdown to the ban commences, the Philippines SEC is closely monitoring the situation and highlighting the importance of adhering to regulatory standards.
Meanwhile, in the ongoing legal battle between Binance Holdings and the United States SEC, new developments have arisen as Binance strongly opposes the SEC’s attempt to incorporate the exchange’s admission of guilt in a $4.3 billion settlement with the Department of Justice (DOJ) into its legal proceedings. The SEC’s move to include this settlement in its case has encountered resistance from Binance.
This legal dispute traces back to June 2023 when the SEC accused Binance of multiple violations of securities laws. As the cryptocurrency exchange challenges the SEC’s procedural approach, the outcome of this case carries significant implications for the future of cryptocurrency regulation in the United States and beyond.
Philippines SEC Announces Three-Month Countdown to Binance Ban, Promoting Regulatory Compliance
In a recent panel discussion on December 13, Kelvin Lee, the head of the Philippines SEC, clarified the timeline for the impending ban on the crypto exchange, one of the world’s largest cryptocurrency exchanges. Lee confirmed that the ban, initially issued as an advisory on November 28, will officially take effect three months from the advisory’s issuance date, as he announced during the panel.
This announcement follows widespread confusion and speculation surrounding the regulatory actions against Binance, particularly regarding its lack of a proper license in the Philippines. Lee addressed these concerns, explaining that the three-month countdown for the ban began on November 29. He also mentioned the possibility of extending the timeline based on feedback and evolving circumstances but underscored the necessity of adhering to regulatory requirements.
Lee provided further context for the decision to allow a three-month grace period, noting that the original recommendation suggested a much shorter transition period, even as short as one week. However, he opted for a more extended timeline, taking into consideration the upcoming Christmas holiday season, with the aim of not imposing unnecessary difficulties on Filipino investors.
In addition to Binance, Lee revealed that two other cryptocurrency exchanges, OctaFX and MiTrade, which recently received advisories for operating without proper registration, will also face bans following the same three-month timeline. The Philippines SEC has identified a significant number of unregistered exchanges operating in the country, hinting at the possibility of more advisories in the future.
Lee defended the regulatory actions against the exchange and other unregistered exchanges, responding to criticism regarding their relatively lower fees compared to registered entities. He clarified that registered exchanges incur compliance costs to ensure they adhere to necessary regulations for consumer protection. Emphasizing this point, Lee stated, “Of course, they are cheaper because they never bothered to register in the Philippines and bothered to comply.”
In his message to local investors, Lee stressed the importance of choosing registered entities for cryptocurrency transactions. Presently, there are 17 virtual asset service providers registered in the Philippines, offering fiat-to-crypto services while complying with the country’s regulations. Lee highlighted that registration plays a vital role in safeguarding consumers and fostering a healthy cryptocurrency ecosystem within the Philippines.
SEC’s Attempt to Include DOJ Settlement in Legal Proceedings
Binance Holdings and its former CEO, Changpeng Zhao, have strongly objected to the recent move by the United States SEC to introduce Binance’s admission of guilt in a $4.3 billion settlement with the Department of Justice (DOJ) into their ongoing legal proceedings. In a legal filing submitted on December 12, Binance challenged the SEC’s attempt, asserting that it was procedurally incorrect and should not be allowed.
The legal battle between Binance and the SEC began on June 5, 2023, when the regulatory agency accused the cryptocurrency exchange of 13 securities law violations. These allegations included claims that Changpeng Zhao and Binance mishandled customer assets on Binance.US, mixed or redirected customer assets, and operated in violation of U.S. securities laws.
In November, the DOJ reached a separate settlement with Binance and its former CEO, effectively resolving the federal probe into the company’s activities. As part of the agreement, Binance agreed to pay $4.3 billion in penalties and committed to continue its operations while complying with U.S. regulations.
Although the SEC was not formally involved in the DOJ settlement, it argued that the federal court overseeing its case against Binance should consider the statements and acknowledgments made by Binance and Zhao in the November 21 settlement. The SEC contended that these settlements underscored Binance’s awareness of its U.S. operations, its service to U.S. customers, and its use of U.S. infrastructure for transactions.
In response, Binance vehemently opposed the SEC’s efforts to incorporate the DOJ settlement into the ongoing legal proceedings. The exchange argued that the SEC failed to demonstrate how the resolutions reached with the DOJ were relevant to the SEC’s allegations against Binance Holdings and Zhao.
In a statement submitted in court on December 12, Binance asserted, “The SEC Notice is an impermissible supplemental brief that identifies no new ‘authority’ and instead attempts to introduce new factual information and arguments. This alone is reason to disregard it.”
Binance further emphasized that presenting a judicial notice should not serve as a substitute for amending the complaint. The company accused the SEC of trying to leverage settlements with other agencies, suggesting that it reflects the SEC’s lack of a clear regulatory approach and authority in this matter.
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