Coins.ph, the largest cryptocurrency exchange in the Philippines, is facing punitive action from financial regulators at the country’s central bank, two people with knowledge of the situation said.
The infractions, which are said to involve serving offshore gambling firms, are serious enough for the 12-year-old company to be stripped of its license to operate, which would cause “an earthquake” in the Philippines’ crypto ecosystem, according to one of the people.
The exchange, which has over 18 million customers, has a 24-hour spot trading volume of about $50 million and controls some 75%-80% of peso-to-stablecoin liquidity in the Philippines, a key transaction in the world’s fourth-largest remittance recipient.
More than 10.8 million Filipinos live outside the country, according to the Commission on Filipinos Overseas, though most use banks and money transfer services to repatriate their earnings, some $43 billion a year.
At the start of this month, Bangko Sentral ng Pilipinas (BSP) reportedly imposed restrictions on deposits to the exchange made through Coins.ph’s main wallet firm, DCPay Philippines.
The restrictions follow the departure of several high-profile compliance staffers, including chief compliance officer Lexi Herrera, the head of anti-money laundering (AML) transaction monitoring Chris Beaño and money laundering reporting officer Irish Calagui.
Neither Coins.ph nor the Philippines central bank responded to requests for comment by publication time.
A little over a year ago, the central bank clamped down on the use of e-wallet applications for gambling purposes, demanding institutions under its supervision cut in-app access to gambling sites.
As a result, several gambling entities migrated to Coins.ph, according to the people. The move had the added advantage of giving the firms access to crypto and stablecoins for paying offshore partners, according to a third person familiar with central bank regulatory processes.
The recent Coins.ph restriction was not time-bound, unlike the temporary suspensions typically imposed on market participants for failing to comply with throughput or latency requirements, for example. In this case, no reason was given, one of the people said.
Coins.ph was one of the earliest crypto wallets and exchanges in the Philippines and later pivoted to providing broader financial services.
In January 2019, Indonesian technology company Gojek bought Coins.ph for $95 million. Coins.ph was later sold to Wei Zhou, who was previously Binance’s chief financial officer.
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