Binance Faces Challenges in SE Asia After $4 Billion US Fine

Last week, Binance agreed to pay $4 billion to resolve a Department of Justice investigation.

Although that case is in the rearview mirror, the world’s largest cryptocurrency exchange could still have a rocky road ahead of it in Asia.

For example, the Philippines’ Securities and Exchange Commission (SEC) announced Tuesday (Nov. 28) that it is blocking access to Binance, arguing that its operator was not a registered corporation in the Philippines authorized to sell or offer securities.

Failure to comply, a notice said, could lead to a fine of 5 million pesos (about $90,000) and 21 years in prison.

Meanwhile, Binance is facing a test in Thailand, where its guilty plea in the U.S. has cast a pall on its plan to launch a new trading operation with Sarath Ratanavadi’s Gulf Energy Development, Bloomberg reported Wednesday (Nov. 29).

Sarath said, per Bloomberg, that Binance wasn’t accused of crimes such as fraud or the misuse of customer money in the U.S. settlement, and that he was confident in the crypto company’s product offering, systems and security.

“Binance grew extremely fast and so probably crossed paths with some regulations,” he said. “We have much more confidence in its credibility after this storm, which should make it a lot stronger.”

Sarath said he picked Binance due to its market-leading position. He added that Thailand’s own SEC is “very strict” and asked several questions, including about Binance, before granting its approvals, the report said.

Binance agreed to pay its fine and plead guilty last week to resolve ongoing DOJ investigations into its business failures connected to the Bank Secrecy Act (BSA), its failure to register as a money transmitting business, and other financial and regulatory violations.

In addition, Binance founder and CEO Changpeng Zhao pleaded guilty to failing to maintain an effective anti-money laundering (AML) program and stepped down from the company.

Although he has been allowed to retain his majority ownership of Binance — despite being barred from returning to a role at the exchange for at least three years — he was this week given a new restriction: being forbidden to leave the U.S. before sentencing.

U.S. District Judge Richard Jones in Seattle on Monday (Nov. 27) overturned an earlier decision that would have allowed Zhao to return to the United Arab Emirates following his plea.

Federal prosecutors had argued against allowing Zhao to leave the country, saying his assets, ties to the UAE and the absence of an extradition agreement between the U.S. and the UAE could allow him to escape sentencing.

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