By the BitPinas team
With the impending possible ban of crypto exchange Binance in the Philippines, many users are facing uncertainty. This comprehensive guide aims to guide a path forward, offering explanation on whether Binance will really be banned, a detailed exploration of alternatives to Binance, including other exchanges, wallets, and decentralized platforms.
Table of Contents
Understanding the Possible Binance Ban
The Securities and Exchange Commission (SEC) of the Philippines has taken action to issue an advisory vs Binance, citing the cryptocurrency exchange’s failure to comply with local regulations. SEC went another step to announce that it is considering to have the exchanged banned in the local internet space.
Read:
In a panel discussion, Commissioner Kelvin Lee defended the advisory vs Binance:
- “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.
Read: Exclusive: SEC Pinpoints Start Date for “Three-Months” Until Binance Ban
Will Binance really be banned in the Philippines? Will the deadline be extended?
- The crypto community is expecting the ban sometime around February 29, 2024, which is three months after the SEC issued the advisory.
- The SEC also said the deadline may be extended, depending on feedback.
- Atty. Rafael Padilla, crypto lawyer and author of Fintech: First Laws and Principles, argued that the SEC cannot ban Binance or direct NTC to block the exchange without a court order.
Possible Scenarios to Consider
There are two events that could happen in the coming weeks:
- The Binance ban does not happen and the exchange continues to be accessible in the Philippines.
- The Binance ban does happen and the exchange is no longer accessible in the country.
With these two situations, the crypto holder may choose to do the following.
Possible Action for Binance Users
1. Do nothing
This action is banking on a situation wherein Binance is not really banned in the Philippines and the advisory remains just an advisory.
- If the Binance ban does not happen, then the user’s funds in the exchange remains accessible and, as they say, life continues.
- If the Binance ban does happen, then the user is faced with the situation wherein they may not be able to access their funds.
- An argument being circulated is that the user can still access Binance using VPN, but it is important to note that Binance itself does not allow its users to use VPN when accessing the exchange.
2. Take Action by Moving The Funds Off Binance
This action is banking on a situation where Binance does really get banned in the Philippines.
- If the Binance ban does not happen, the user can do whatever they want with the funds they withdraw.
- If the Binance ban does happen, then the user can still do whatever they want with their funds because they can still access it (because it is no longer in Binance.)
If the user does proceed to do the second action, here are possible actions to consider:
Exploring Alternative Platforms
When selecting a new platform, consider security, regulatory compliance, user experience, fees, and available cryptocurrencies. Here are some alternatives:
Licensed Centralized Exchanges:
Centralized exchanges are cryptocurrency trading platforms that facilitate transactions between buyers and sellers through a central intermediary.
As a licensed centralized exchange (or licensed virtual asset service provider (VASP), they have all the necessary permits to legally operate in the Philippines.
Considerations: Pros and Cons
With unregistered exchanges, if something bad happens, there might be no legal recourse because local authorities cannot obviously run after them.
On the other hand, licensed VASPS can be held accountable in Philippine courts or to the regulators like the BSP and the SEC. Users can send complaints to regulators or file cases.
A common narrative is that local exchanges have higher fees. As mentioned earlier, being licensed means they have additional compliance cost. And because they are not global exchanges, they have smaller liquidity.
However, local exchanges are constantly announcing updates and improvements in the last few months.
Click here for a complete list of licensed crypto exchange in the Philippines. Some popular centralized exchanges in the Philippines include:
Coins.ph
Established in 2014, Coins.ph is regulated by the Bangko Sentral ng Pilipinas, holding Virtual Asset Service Provider (VASP) and Electronic Money Issuer (EMI) licenses.
| Website | https://coins.ph/ |
| KYC Requirements to Open an Account | – Phone Number – Email Address – Valid ID – Personal Information – Selfie Verification |
| Minimum Buy Price | ₱5 |
| Number of Cryptocurrencies Available | 58+ |
Coins.ph also has Coins Pro, an order book crypto trading platform. An order book crypto trading platform is a type of crypto exchange wherein when the user buys a cryptocurrency, there is also a user on the seller side of the trade, organized by price level.
(Read: How to Use Coins Pro Exchange by Coins.ph)
PDAX (Philippine Digital Asset Exchange)
PDAX, established in 2018, is a regulated digital asset exchange platform allowing users to trade cryptocurrencies. Licensed by the BSP and the SEC, PDAX previously operated an order book exchange before a system switch, which now means the user trades in a more simplified interface.
PDAX provides various payment options such as bank transfers, online banking, and e-wallets. Additionally, users can securely store their cryptocurrencies in the platform’s built-in digital wallet.
| Website | https://pdax.ph/ |
| KYC Requirements to Open an Account | Email AddressValid IDPersonal InformationSelfie Verification |
| Minimum Buy Price | ₱50 |
| Number of Cryptocurrencies Available | 37+ |
(Read: How To Use PDAX: Local Crypto Trading Platform (Tagalog Guide)
GCash
GCash is a popular e-wallet giant in the country. GCash does not have license, but VASP license PDAX powers its crypto platform GCrypto.
| Website | https://www.gcash.com/services/gcrypto |
| KYC Requirements to Open an Account | – Personal Information – Valid ID – Mobile Number – Email Address |
| Minimum Buy Price | Depending on token |
| Number of Cryptocurrencies Available | 27 |
(Read: GCrypto Guide | How to Buy & Sell Crypto on GCash)
Maya
Maya, formerly Paymaya, announced its in-app crypto trading feature in 2022. Its crypto offering was made possible with its partnership with the global crypto platform, Coinbase Institutional, as its liquidity provider.
Maya is a popular e-wallet in the country, but it is also registered as a VASP and a digital bank.
| Website | https://www.maya.ph/crypto |
| KYC Requirements to Open an Account | Phone NumberValid IDPersonal InformationSelfie Verification |
| Minimum Buy Price | ₱1 |
| Number of Cryptocurrencies Available | 21 |
(Read: Maya Now Allows Users to Send And Receive Crypto)
BloomX
BloomX is another crypto platform that allows users to buy and sell crypto with PHP. Previously operating a beta-only web platform for retail users, BloomX has shifted back to its original focus: providing remittance and OTC (over-the-counter) cryptocurrency trading services.
| Website | https://www.bloom.solutions/ |
| KYC Requirements to Open an Account | No data available |
| Minimum Buy Price | No data available |
| Number of Cryptocurrencies Available | 250+ |
(Read: Philippines Gets New Crypto Trading Platform With BloomX App)
Moneybees
Moneybees Forex Corporation is a crypto OTC service provider. It promises to offer no trading fees, which means the buy and sell rates are fixed. Moneybees also launched its “Buy and Sell Via Chat” feature, which enables users to buy and sell crypto OTC virtually—by just chatting with their customer service.
| Website | https://www.moneybees.ph/ |
| KYC Requirements to Open an Account | – Personal Information – Valid ID – Proof of Address – Proof of Income |
| Minimum Buy Price | ₱1,000 |
| Number of Cryptocurrencies Available | 200+ |
(Read: Moneybees Opens New Outlets, Aims to Process Php 2 Billion Crypto Transactions This Year)
Start Using Decentralized Exchanges (DEXs):
Introduction
Decentralized exchanges are cryptocurrency trading platforms that operate without a central authority. Instead, these rely on a peer-to-peer network of users to facilitate trades. This design eliminates the need for a trusted third party, which can improve security and privacy.
Pros
In addition, DEXs provide users with greater control over their funds, as they are not held by a centralized entity.
Cons
- Note that you cannot put funds in a DEX, you will need a wallet (like MetaMask or Phantom).
- In addition, users must remember the seed phrases. If these are lost, the user will not be able to retrieve their funds. Simply put: the funds will be lost forever. This the tradeoff in exchange to more privacy and control.
- You also need to be vigilant with potential hacks or scam. (Although it can be argued that every option in this list has that risk, but more so in decentralized exchanges.)
(Read: 5 Popular Decentralized Exchanges)
Uniswap
Uniswap is a decentralized exchange (DEX) built on the Ethereum blockchain. It enables users to trade ERC-20 tokens without the need for intermediaries or platform fees. Uniswap uses a novel automated market-making (AMM) algorithm to facilitate token trading, eliminating the need for traditional order books and matching buyers and sellers.
Uniswap is governed by its governance token, UNI.
| Website | https://uniswap.org/ |
| Number of tokens offered | 1025+ |
| Trading Fee | 0.01%, 0.05%, 0.30%, and 1.00% |
| Non-custodial wallet needed | MetaMask |
(Read: Uniswap Guide, Usecases, and Where to Buy in the Philippines)
PancakeSwap
PancakeSwap is a decentralized exchange (DEX) built on the Binance Smart Chain (BSC). It allows users to swap BEP-20 standard tokens with ease.
PancakeSwap uses an AMM model, where users trade against a liquidity pool. The platform has grown to become one of the most popular AMMs on BSC by user count, and it is known for its lower transaction fees.
Curve
Curve is another Ethereum-based DEX. Though it was primarily launched for stablecoins, it still supports ERC-20 tokens.
| Website | https://curve.fi/ |
| Number of tokens offered | 122+ |
| Trading Fee | 0.04% |
| Non-custodial wallet needed | MetaMask |
Jupiter
Jupiter is a DEX for the Solana blockchain. It operates as an aggregator, gathering liquidity from various DEXs and AMMs within the Solana ecosystem.
| Website | https://jup.ag/ |
| Number of tokens offered | 302+ |
| Trading Fee | 0.30% |
| Non-custodial wallet needed | Phantom Wallet |
THORSwap
THORSwap is a THORchain-based DEX that supports cross-chain L1 swaps across 10 major L1 blockchains.
Foreign Exchanges
Based on the top five most famous centralized exchanges in the Philippines, sorted by monthly visits based on Similarweb data, three are international—Binance, Bybit, and Kucoin. Other options are MEXC and Gemini.
Pros
- As global exchanges, these platforms have higher liquidity and lesser fees.
- They also tend to list coins faster.
Cons
- However, it should be noted that SEC Commissioner Kelvin Lee said in a December event that the Philippine regulator is taking a wait-and-see approach to see if these foreign entities will register.
- And if these entities do not register, the same advisory issued against Binance is expected to be released against them.
- As they are foreign exchanges, local users have limited recourse (no legal recourse, for example) if something happens to their funds. For example, if the exchange shuts down.
(Read: SEC Pinpoints Start Date for “Three-Months” Until Binance Ban)
Transferring to Crypto Wallets
The selection of a cryptocurrency wallet is important because it affects the security, accessibility, ease of use, and functionality of one’s cryptocurrency holdings. There are different types of wallets, each with its advantages and disadvantages. Choosing the right wallet depends on individual needs and preferences.
Custodial Wallets
A custodial wallet is a wallet in which a third party holds the private keys on behalf of the user. The third party has full control over the user’s crypto assets, including the responsibility of managing the wallet key, signing transactions, and protecting the user’s crypto assets. This makes custodial wallets more susceptible to hacks than non-custodial wallets, as the third party has access to the user’s private keys.
- Custodial wallets are typically offered by centralized exchanges, and they provide a convenient and secure way for users to store their crypto assets.
- Basically, when a user creates an account on a CEX, a custodial wallet is automatically generated for a user’s crypto trading experience.
Non-Custodial Wallets
A non-custodial wallet provides users with complete control over their assets. Users are responsible for managing their own private keys, signing transactions, and protecting their cryptocurrency assets.
Some of the notable non-custodial wallets are:
Hardware Wallets:
Hardware wallets offer top-tier security by keeping private keys offline on a physical device. This offline storage makes them less vulnerable to hacking and theft, making them a preferred choice for safeguarding significant amounts of cryptocurrency over an extended period.
Advantages include the highest level of security for private keys, resistance to online hacks and malware, and compatibility with various cryptocurrencies. Notable hardware wallets in the market include Ledger Nano S, Trezor One, and Coldcard.
Software Wallets:
Software wallets store private keys within a software application and are widely used in the current cryptocurrency landscape.
Popular software wallets include Guarda Wallet, known for its high security and extensive support for crypto assets, Exodus Wallet, Coinbase Wallet, Trust Wallet, and MetaMask.
Mobile Wallets:
Mobile wallets are smartphone applications designed for on-the-go management and storage of cryptocurrencies. While providing convenience and functionality, their security is contingent on the mobile device’s security.
Advantages of mobile wallets include easy access to cryptocurrencies, support for various cryptocurrencies and features, and QR code scanning for swift transactions. Coinomi and Mycelium are among the popular mobile wallets in use.
Transact via P2P – Person to Person
By peer-to-peer, we mean here P2P in its purest definition – people meeting in real life to exchange their crypto in exchange for fiat to another person. (This is in contrast with escrow services, which the BSP things is a VASP activity).
Transitioning to a New Platform
- Follow the sign-up and know-your-customer (KYC) procedures of your chosen platform.
- For DEXs, you’ll need a compatible wallet and an understanding of smart contracts.
- Familiarize yourself with the new platform’s features and test with small transactions.
- Staying informed and safe
- Keep abreast of regulatory updates.
- Be vigilant against scams in the crypto space.
- Engage with local crypto communities for insights and experiences.
(Read: How to Buy Crypto in the Philippines in 2023)
This article is published on BitPinas: How to Prepare For A Possible Binance Ban in the Philippines
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/feature/prepare-binance-philippines-alternative/
