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Philippine SEC Warns Against Crypto Schemes
The Securities and Exchange Commission (SEC) of the Philippines has warned the public against individuals and groups engaged in unauthorized crypto investments and trading, according to an announcement on July 1.
The Philippine SEC warned those who were involved in crypto schemes could face a fine or 21 years of imprisonment or both. It explained that:
“A maximum fine of P5 million or imprisonment of 21 years or both await those who act as salesmen, brokers, dealers or agents of entities engaged in unauthorized investment schemes[…] The Bayanihan to Heal As One Act, also punishes those participating in cyber incidents that make use or take advantage of the current crisis arising from the COVID-19 outbreak to prey on the public through scams, phishing, fraudulent emails, or other similar acts.”
Three projects are being warned
The Philippine authorities also listed three unauthorized crypto Ponzi schemes, one of which uses a protocol based on Ethreum blockchain: Forsage, RCashOnline and The Saint John of Jerusalem Knights of Malta Foundation of the Philippines, Inc.
According to the Philippine SEC, both Forsage and RCashOnline lack the necessary licenses to operate. Hence, they are not allowed to take investments from the public or issue investment contracts and other forms of securities.
Forsage, the Philippine SEC said, is a crowdfunding platform based on the Ethreum blockchain and active income is generated depending on the number of referrals and membership fees someone gathers. Since it provides smart contracts, the Philippine SEC noted Forsage then provides an investment contract that has to be approved by the regulator. Forsage is also not in the list of virtual currency exchanges registered with the Philippine central bank.
Saint John of Jerusalem Knights of Malta Foundation, although it was registered with the SEC, it didn’t comply with its reportorial requirements and was revoked over 17 years ago.
As Ponzi as it gets
All three warning projects have one thing in common: they are Ponzi schemes by nature. According to the statement, other than lacking the necessary licenses, Forsage’s compensation plan resembles a Ponzi scheme, where investors are paid using the contribution of new investors.
RCashOnline relies heavily on recruiting members in exchange for high monetary rewards rather than on selling products.
The SEC warned that if a company’s registration has been revoked, such as Saint John of Jerusalem Knights of Malta Foundation, other than for the purpose of liquidation, any other activities are illegal.
Author: Cointelegraph By Ting Peng
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