Additional reporting from Nath Cajuday

During the panel discussion: “Empowering Consumers: Understanding the SEC’s Directive on Unregulated Exchanges” held at the Coins.ph office, Kelvin Lee, Commissioner of the SEC was asked to clarify when will the Binance ban take effect, citing the confusion on the widely reported three months deadline until Binance will be banned in Philippine Internet space:

“It is supposed to be three months from our issuance date. Three months from November 29. Depending on how feedback is, we can actually extend that, but currently we should feel lucky with the three months. I’ll be blunt, the original recommendation on my desk was one month. Someone even mentioned one week as a transition period. So the three months was actually a Christmas thing so as not to traverse Christmas and not to make hard for Filipino investors during that time.”

Kelvin Lee, Commissioner, Kelvin Lee

Will it only be Binance? Lee clarified that all the other unregulated exchanges cited, including OctaFX and MiTrade will be banned three months after issuance of the advisory.

For the other unregistered exchanges, the SEC said it still has a long list that will come out targeting them, but also doing a “wait-and-see” approach if they will register.

Further, the speakers, including Lito Villanueva of RCBC/FintechAlliance.ph and Jen Bilango of Coins.ph answered some of the biggest questions surrounding the recent advisories vs unregistered entities. The panel discussion was moderated by fintech veteran Ida Tiongson.

Below is a summary of the notes BitPinas took during the panel discussion.

Background and Introductions:

• The SEC Commissioner recounted the advisories it has issued against crypto scams and unregistered exchanges dating back to 2019.
• Just last month, SEC released an advisory vs Binance, the global crypto exchange, and has said it is coordinating with the NTC to block access not just to Binance but also unregistered exchanges like Mitrade and OctaFX, which are also mentioned in previous advisories.
• For Fintech Alliance PH, they see that they have a role in assisting the SEC on its initiatives against unregistered exchanges. Villanueva then emphasized that they will help in educating Filipinos. This is echoed by Bilango of Coins.ph.

On the advisory vs unregistered exchanges

• Commissioner Lee on other unregistered exchanges not yet named in advisories: “We were doing a wait-and-see approach to see if these foreign entities will register.”
• “We still have a long list that will come out, but we will let them have Christmas.”
• “You cannot tell me you’re not operating in the Philippines without targeting Filipino online investors,” Commissioner Lee on offshore exchanges operating in the country without appropriate licenses to offer securities.

On criticism that Binance should not be banned because it is cheaper

The SEC Commissioner then mentioned:

• “I kept getting asked: why ban Binance when it is cheaper and has more options—of course, they are cheaper because they never bothered to register in the Philippines and bothered to comply. Unlike the registered entities, there is of course compliance costs (that the VASPs have to shoulder).”
• Commissioner Lee first clarified that it is their mandate to remind Filipino investors not to invest in unregistered exchanges, instead, there are VASPs (virtual asset services providers) that are registered and have accountability in case something happens.

When will the Binance take effect?

• SEC Commissioner Lee confirmed that Google and Meta have already responded to the SEC’s request to ban Binance-related ads from being shown in the country’s internet space.
• When did the start of the three months until ban took effect? Lee said it started from the day of issuance – November 28 but also noted the date of the ban’s start can be extended. See the first quote at the beginning of this article.
• “I’ll be blunt, the original recommendation on my desk was one month. Someone also recommended one week.”
• Lee then stressed that they gave two to three months for Filipinos to adjust to the situation. It should be noted that the SEC gave Binance 90 days from the date of advisory before the exchange will be banned in the internet space of the Philippines.
• Why not a cease-and-desist order (CDO) first? Moderator Ida Tiongson asked if the SEC can issue a cease-and-desist to an unregistered company.
• Lee said that while it is possible “…compliance through the CDO, why would they bother? An attempt to enforce the advisory is through the NTC blocking.”

On Upcoming Crypto Regulations from the SEC

• “Instead of public consultation, we will choose a small group of experts who are aware of this field, who will review the rules and send feedback.”
• He shared that the draft of the crypto framework is already on his table and that he will consult firms and even universities about it.
• Lee: “That draft was very SEC-centric. I don’t foresee us having a problem (with other regulators like the BSP) because if there would be an overlap, we will just make another IRR (implementing rules and regulations).”

Final Words

• Commissioner Lee: “Invest in registered entities.” Currently, there are 17 VASPs in the country, which are allowed to offer fiat-to-crypto services.
• “What we’re doing is to educate the builders, and developers through our weekly education show.” – Bilango on Coins’ initiative to educate Filipinos.
• Villanueva: “There would be more of this kind of discussion. I think BSP would be also part of this campaign.”
• Lee: “At the end of the day, it’s about registration. At the end of the day, it’s about consumer protection. Work with the registered entities.”

This article is published on BitPinas: SEC Sets Timeline for Binance Ban: Three-Month Period Begins from Advisory Issuance Date

Disclaimer:

• Before investing in any cryptocurrency, it is essential that you carry out your own due diligence and seek appropriate professional advice about your specific position before making any financial decisions.
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• Source: https://bitpinas.com/regulation/sec-clarifies-3-months-until-binance-ban/