Unregistered Cryptocurrency Investments: SEC Advises Public to be Wary

The Securities and Exchange Commission (SEC) advised the public not to invest or stop investing in schemes or initial coin offerings and digital asset trading which are not compliant with the guidelines of the Bangko Sentral ng Pilipinas (BSP) and SEC. The SEC, through its Enforcement and Investor Protection Department, recently issued a number of advisories warning the public about the activities of certain entities, including the following:

  • THE BILLION COIN (TBC) by KRIS KRINGLE, which promotes its “TBCoin” as a true and decentralized cryptocurrency that aims to revolutionaize the global financial system in order to eradicate world poverty. Unlike Bitcoin and other cryptocurrencies which strictly follow the market-driven norms, the value of TBCoin is said to be user-based because its price apparently increases depending on the number of its users/holders or investors. As such, TBC called it as an “Abundance-based Cryptocurrency.” As posted online, TBC claims that the value of its TBCoin will never drop and shall continuously increase by 1-5% daily until it finally reaches One Billion Euros per 1 TBC. It also offers a number investment packages in the Philippines with a return of 100% every 25 days, with additional bonuses and leverages intended to entice its investors to increase their investments and to encourage them to invite more members in order to generate more income. (Advisory dated 14 April 2020)
  • CRYPTEC by POINT PLACE, LTD., operating in the Commonwealth of Dominica. It is a non-licensed offshore crypto-currency broker which started in September 2019. As posted online, CRYPTEC offers a number of account types or compensation packages which grants access to ints unique web-based trading platform. CRYPTEC offers 50-150% Trading Bonus or income which more than enough considering the volatility of the cryptocurrencies. (SEC Advisory dated 6 April 2020)
  • BITCOIN REVOLUTION, doing business primarily in Australia and Europe but engaged in investment-taking activities in the Philippines. As posted online, BITCOIN REVOLUTION claims that for a minimum investment of $250, investors can earn as much as $1,000 or 300% per day. BITCOIN REVOLUTION asserts that its software enables anyone to trade Bitcoins and other cryptocurrencies easily with a success rate ranging between 88% to 95% per transaction. (SEC Advisory dated 30 March 2020)

The SEC noted that any promise that defies the normal financial logic is “surely unreliable and sketchy“.

Per the record of SEC, these entities are not registered as a corporation or partnership, and is not authorized to solicit, accept or take investments/placements from the public not to issue investment contracts and other forms of securities defined under Section 3 of the Securities Regulation Code (SRC) because these entities do not have a secondary license from the SEC to solicit investments or other securities from the public for whatever purpose as provided under Sections 8 and 28 of the SRC.

The SEC also noted that these entities do not appear among the registered banks, exchanges or companies engaged in digital assets with the BSP in accordance with the Guidelines for Virtual Currency Exchanges (BSP Circular No. 944 [full text] [summary]), which requires all entities engaged in Virtual Currencies in the Philippines to obtain a Certificate of Registration to operate as remittance and/or transfer company. 

P&L Law

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