THE Securities and Exchange Commission (SEC) defended its move to accept government-blocked Binance Holdings Inc. as a global crypto asset exchange partner in the agency’s regulatory sandbox.
SEC Chairman Francis E. Lim said admitting Binance in the sandbox does not mean that the business may happen outright.
‘We should not close our minds to innovation. In fact, my principle is we do not approve innovation only because it is new, neither do we reject it because it is unfamiliar. I think we are on the verge of global innovation,’ Lim said.
Binance’s platform as been geoblocked by the National Telecommunications Commission and removed from major app stores under orders from the SEC in 2023
The SEC in 2024 has identified Binance and concluded that the public’s continued access to these websites or apps poses a threat to the security of the funds of investing Filipinos.
In May, however, the SEC approved BlockShoals Technologies Inc. to kickstart the testing of its financial products and services under the agency’s regulatory sandbox.
Its model allows Philippine-based users to access selected products and services offered through its global virtual asset service provider partner.
Upon successful integration with its virtual asset service provider (VASP), BlockShoals will proceed with the implementation of its approved testing plan, including user onboarding through its partner, Binance.
Both Binance and Blackshoals do not hold a VASP license from the central bank.
SEC Commissioner Rogelio V. Quevedo said being included in the sandbox does not cure the penalties that will be imposed on a company that has committed violations against the securities regulations code.
‘Being in the sandbox is not an excuse, nor is it the highway, to be approved already by the SEC. It is just there so that the SEC can properly evaluate,’ Quevedo said. ‘I can also say that to conduct testing, I cannot agree that we will open the system, because abuses might be committed while it is being tested.’
‘The sandbox is not an excuse to get on the road to approval by the SEC. It is not because you are in the sandbox that you will continue to be approved by the SEC. There are still a lot of processes that it will go through,’ he added.
Lim said even in mature markets like Singapore, it takes quite a while-about two years-before one can graduate in the sandbox.
He added that another market innovation is the tokenization of the shares in stock to let in as many people as possible into the trade.
In crypto, tokens are digital asset built on top of an existing blockchain platform. Unlike coins, which operate on their own native blockchain, tokens can represent anything from a stake in a project to a specific utility inside a digital ecosystem
‘There are a lot of shares with high value. So, tokenize it. Unitize it, right? That can generate more market participants. So, let’s keep an open mind to innovation,’ Lim said.