The Philippine government issued a warning to domestic investors about using unlicensed crypto exchanges following the peak of the FTX collapse.
A warning against using unregistered crypto exchanges that are active in the Philippines was issued by the Securities and Exchanges Commission (SEC). The SEC warned about “the recent collapse of a large international cryptocurrency exchange,” without specifically mentioning the FTX exchange.
Philippine SEC urges to register
The government agency reaffirmed that any entity wishing to conduct business within the nation must register with the SEC, citing local laws. They penned:
“SEC is the registrar and overseer of the Philippine corporate sector; it supervises more than 600,000 active corporations and evaluates the financial statements (FS) filed by all corporations registered with it.”
The SEC claims that several exchanges are using social media and online advertisements to specifically target Filipino investors. Additionally, the government agency emphasized that the exchanges currently “illegally permit” Filipinos to access their platforms and enable the creation of accounts online.
These exchanges “offer various products and schemes which are high-risk and occasionally fraudulent,” according to an SEC report.
The SEC warned local investors not to use the Binance cryptocurrency exchange on August 4 after highlighting it. The exchange does not have a license to solicit investments, according to the SEC. Despite this, the consensus in the exchange was that they would be able to enter the nation.
Similar advice was given to local investors by Banko Sentral ng Pilipinas (BSP), the nation’s central bank, on August 19. The BSP urged Filipino citizens to avoid using foreign virtual asset service providers who are based abroad and are not authorized to operate in their country.
The central bank claims that when dealing with such businesses, it would be challenging to enforce any consumer protection laws and legal remedies.
According to Philippine law, a company must register with the SEC in order to do business there, as the regulator serves as both the registrar and the watchdog of the nation’s corporate sector.
Without a properly filed and approved registration statement from the SEC, securities may not be sold, offered for sale, or distributed within the Philippines.
No lending company is permitted to conduct business without first receiving permission from the SEC, so only companies registered in the Philippines are permitted to engage in the granting of loans from their own capital funds.