After Changpeng Zhao, the CEO of Binance, went to the Philippines last June to discuss plans for the exchange to get licenses, Infrawatch, the infrastructure think tank, has been on a crusade to get the local regulators to investigate the global exchange. BitPinas interviewed Binance Head of APAC Leon Foong regarding these letters and the status of their license acquisition in the Philippines.
Timeline of Events:
- (June 8) CZ visited the Philippines and talked to PH Media re: Binance expansion.
- (June 8) CZ said they intend to obtain a local crypto license.
- (June 9) Then Finance Secretary Dominguez said Binance is not yet registered and they are monitoring it.
- (June 10) Binance Scholarship for Filipinos.
- (June 15) Infrawatch PH sent a letter to the BSP asking it to ban and suspend the exchange for illegally operating here.
- (June 16) Binance responds: “We are open to discussions”.
- (June 16) Binance is hiring 2,000 more people.
- (July 7) Infrawatch Letter to DTI.
- (July 7) Binance Answers New Infrawatch Letter.
- (July 11) DTI Responds.
- (July 26) Infrawatch sends letter to SEC.
- (August 4) SEC responds, cautioning the public not to invest with Binance.
To our knowledge, three letters were sent – first with the Bangko Sentral ng Pilipinas (BSP), then to the Deparment of Trade and Industry (DTI), and finally to the Securities and Exchange Commission (SEC).
There is no public information on whether the BSP replied, but the DTI did, telling Infrawatch to address the matter to the central bank because, in its view, cryptocurrencies are not consumer products.
But while everyone thought the issue would just quiet down, the SEC sent a response letter to Infrawatch, categorically stating that Binance does not have a license to operate in the Philippines, and asking victims of the exchange to file a complaint with the Commission.
This is the first time that the Commission commented about Binance. (It is worth noting that it was a response letter and not an advisory published on the SEC website.)
Infrawatch hails the SEC’s statements, calling it a clarification of the government on unlicensed crypto platforms.
BitPinas reached out to Binance, with a spokesperson providing the following comment: “We have written to the SEC to clarify the false and misleading allegations in the Infrawatch complaint and the SEC have acknowledged our letter.“
BitPinas Interview with Binance APAC
BitPinas interviewed Binance APAC Head Leon Foong, who provided more information about their current situation in the Philippines.
On the status of Binance’s acquisition of a license in the Philippines:
Foong began the conversation by citing the current foreign deposit investments (FDI) in the Philippines. “I think we need to really take a step back, and really understand the impact that global technology players like Binance can have on the economy in Philippines,” he said.
The FDI in the Philippines in 2021, he said, was $10.5 billion, but in the first half of 2022 alone, it was already $9.3 billion for digital asset companies alone.
Foong said Binance wants to bring more of those kinds of investments to the Philippines, and they plan to do that by operating in the country under a regulated license.
“We’re actually in the process of finalizing an acquisition of EMI and VASP license. So that’s actually in the process. Right now, the details, you know, unfortunately, it’s a confidential conversation between us and the regulators. So we are not able to comment more on that. But the bottom line here is we want to bring FDI into the Philippines [and] Binance established as a registered entity, we have already gone through the process and identified the targets.”
“And now we’re actually just in the process of formalizing the actual acquisition.”
On the topic of the Infrawatch Letters:
“I think we appreciate that there is a need to make users aware of the various risks that are available and present in this market,” Foong said, but quickly added the safeguards of all assets on Binance.
“In terms of security, we invested a lot to ensure that [we have] multi-threshold signature protections for various wallets. We also invested a lot in terms of ensuring that should there be any vulnerabilities or hacks. For example, we actually in Binance has this fund called SAFU, which is Secure Asset Fund for user that has holdings of up to $1 billion that can be used to pay out to users should their accounts be subjected to any form of hacks or vulnerable attacks. That’s number one.”
When pressed on the matter of Infrawatch, Foong has this to say:
“Just to address a lot of these baseless accusations that somebody has made is that if our internal processes were not up to the minimum standards, we will not be able to obtain licenses in the likes of France, Italy, Spain, Dubai, Abu Dhabi, Bahrain. These are all licenses that we’ve got recently within the last six to nine months, I think it’s a testament to you know how much we’re invested in our internal controls and compliance.”
What will a licensed Binance mean for the market?
“By having more and more global players in the market of global liquidity, what this offers to users in Philippines is choice,” Foong said, noting if users are given the choice, they choose what asset class they want to invest in.
“But if you take away that choice from the users, the ultimate people who already lose out is the everyday person who wants access, who wants inclusion into the new age financial system. So I think one thing that’s really close to our heart is really financial inclusion, and financial empowerment. And that’s the reason why we invest so much money into our technology to really ensure that people can get access to, you know, the Binance suite of products, and actually also invest not just in terms of products, also in two separate businesses like Academy and Masterclasses that also educate users on the various risks and upsides and the various technology and fundamentals behind digital assets before they actually start their investment journey,” Foong added.
This article is published on BitPinas: [Exclusive Interview] Binance APAC Calls Infrawatch Letter “Baseless”
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.