SEC warns public vs cryptocurrency schemes by 14 firms

MANILA, Philippines — The Securities and Exchange Commission (SEC), the corporate regulator, has warned 14 entities engaged in online investment activities.

NewG, Smart Capital, Gener8X, Paid2Prosper, Coins and Mining Trading, PSOPOWER Apps, TradeConnec, IronTrading, ExpertTrading, OneCash, Lucky Coins, Miner’s Investment Group, Digital Coin Trading and All Pal for All Seasons, the SEC said, are either using money or cryptocurrencies to solicit investments but are not registered with the regulator.

Based on its investigation, the SEC said the scheme includes offering investment contracts in their corresponding Facebook pages or secret Facebook groups and chat rooms; offering unrealistic return on investments ranging from 10 to 200 percent a month; requiring their interested investors to pay their initial investments by depositing their money to a specific bank account, Coins.Ph account, GCash or through other modes and usually claim that they invest their funds in bitcoin and other cryptocurrencies to demonstrate their earning capacity.

“The public is hereby warned that such investment schemes, whether with the use of money or cryptocurrencies, are considered as securities subject to the regulatory authority of this Commission,” the SEC said yesterday.

It added that the recruitment of investor-members under the guise of sponsoring a person into the system is likewise considered a form of investment solicitation or a sale of securities, adding that the offering or sale of securities to the public without a permit or license from the Commission is a violation of Section 8.1 of the Securities Regulation Code (SRC).

Those who act as salesmen, brokers, dealers or agents of these unregistered investment entities in selling or convincing people to invest in these schemes being offered by them, including solicitations or recruitment through the internet, may likewise be prosecuted and held criminally liable under Section 28 of the SRC and penalized with a maximum fine of P5 million or 21 years imprisonment, the SEC added.

Accordingly, those who invite or recruit other people to join or invest in this venture or offer investment contracts or securities to the public may be held criminally liable or accordingly sanctioned or penalized in accordance with an earlier Supreme Court decision, the SEC said.

The SEC also warned against the rampant internet-based bitcoin and cryptocurrency Ponzi schemes, which offer or guarantee a huge profit in a very short period and promise little or no financial risks.