MANILA -Public policy think tank Infrawatch PH on Monday urged the government to strengthen its regulatory oversight of cryptocurrency exchanges that offer services to Filipinos, warning of the possible risks taken by their local customers.
In a letter sent to the Securities and Exchange Commission (SEC), Infrawatch PH called on the regulator and the Bangko Sentral ng Pilipinas (BSP) to turn its attention to the two largest cryptocurrency trading exchanges to date—Binance and Coinbase.
The two are facing law violations and regulatory scrutiny in the United States for allegations ranging from mishandling of customer funds to money laundering, as well as fraud, offering illegal securities and other illicit activities.
READ: US steps up crackdown on crypto with lawsuits against Coinbase, Binance
“The recent developments in foreign jurisdictions provide the BSP and other regulators with ample motivation to take stronger action against unregistered [virtual asset service providers] operating in our country,” Infrawatch PH Convenor Terry Ridon said in the June 26 letter.
Ridon noted that these cryptocurrency exchanges have been operating locally for several years now, attracting investments from approximately 3.4 million Filipino users.
READ: BSP: Bitcoin trade in PH quadruples as sheen lures young Pinoys
“The absence of registration for Binance, Coinbase, and other unregistered cryptocurrency exchanges jeopardizes the financial security of millions of cryptocurrency traders and billions worth of virtual asset transactions in the Philippines,” he added.
“While we commend the regulatory responses made by Philippine authorities, we firmly believe that a stronger regulatory approach is necessary,” the letter read, referring to the two latest regulatory advisories issued by the BSP and the SEC.
To recall, the SEC responded in August last year to a complaint letter filed by Infrawatch PH saying that Binance “does not possess the necessary authority and license to solicit investments.”
The SEC further cautioned the public against investing with the global company that operates the largest cryptocurrency exchange to date.
READ: Binance says it is aligned with SEC’s mission to protect users
Likewise, the BSP issued a public advisory in the same month, urging the public to refrain from engaging with unregistered or internationally domiciled virtual asset service providers.
“However, it is disconcerting that a few days after these issuances, Binance was allowed to participate in the organizational meeting of the Senate Committee on Banks, Financial Institutions, and Currencies on August 23, 2022, in the presence of key officials from the SEC and BSP,” Ridon said.
“It is truly alarming to witness Binance, the primary offender, present at the same committee hearing.
Their blatant disregard for regulatory requirements and our laws is deeply concerning,” he added.
To safeguard Filipinos, Ridon suggested that the SEC and the BSP should prohibit local banks and nonbank financial institutions—such as GCash, Seabank, Unionbank and BPI, among others—from processing payments to Binance. INQ