Group asks BSP to probe, suspend crypto exchange

Infrawatch PH, a policy think-tank organized by a former legislator, has filed a formal complaint against Binance at the Bangko Sentral ng Pilipinas (BSP) and petitioned to suspend the virtual asset services provider (VASP).

In a letter addressed to BSP Governor Benjamin E. Diokno on Wednesday, Infrawatch PH Convenor Terry L. Ridon petitioned that the BSP conduct motu propio proceedings on the operations of Binance Holdings Ltd. in the country.

After notice and hearing, Infrawatch PH said, should Binance be found to be an unregistered VASP, the BSP should suspend the operations of the company and its affiliates as well as reject future applications of the company to register with the BSP.

“Binance’s operations without a license give it an unfair competitive advantage. To date, there are 19 entities that have been given the VASP license and are consequently bound by strict compliance rules, while Binance continues to flout the regulatory requirements of the Philippine government,” Ridon said in the letter.

Infrawatch PH said there are 3.4 million Filipino Binance users. Citing Finance Secretary Carlos G. Dominguez, Ridon said, these users “cannot get legal protection from the BSP.”

Ridon said, in his letter to Diokno, that Binance does not have a Certificate Authority from the BSP and registration from the Securities and Exchange Commission (SEC).

Apart from this, Ridon said Binance is either under investigation or banned in 13 countries including the United States, Japan, the United Kingdom, Canada and other Southeast Asian countries such as Malaysia, Thailand, Indonesia, and Singapore.

Citing people familiar with the matter, Bloomberg News reported last June 7 that “US regulators are investigating whether Binance Holdings Ltd. broke securities rules by selling digital tokens just as the crypto exchange was getting off the ground five years ago.”

“Binance, which runs the world’s biggest exchange and says it’s not domiciled in any one country but has affiliates scattered across the globe, has emerged as a focal point for American investigators seeking to rein in the crypto industry,” the report added.

Bloomberg News has previously reported it faces investigations from the Justice Department, the Commodity Futures Trading Commission and the Internal Revenue Service.

“Filipinos are exposed to several other financial risks every day, especially with the growing number of VASP users and cryptocurrency traders in the country. Binance exploits the Philippine market without accountability,” Ridon said in the letter.

In a statement, Ridon said the emerging public concern for the regulation of the cryptocurrency sector stems from the current crash in the cryptocurrency market. 

Infrawatch said Bitcoin trading reached as low as $20,889, a level unseen since December 2020. This was also more than 60-percent lower than its level in November 2021.

Meanwhile, Infrawatch PH said Ethereum fell to around $1,099, which is also its lowest price since December 2020.