The Securities and Exchange Commission (SEC) of the Philippines has warned the public against individuals and groups engaged in unauthorized investment and trade in cryptomoney, according to an announcement made on 1 July.
The Philippine SEC warned that those involved in cryptomoney schemes could face a fine or 21 years in prison or both. It explained that:
„A maximum fine of P5 million or a penalty of 21 years imprisonment or both awaits those who act as sellers, brokers, dealers or agents of entities engaged in unauthorized investment schemes […] The Bayanihan to Heal As One Act also punishes those who participate in cyber incidents that 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.
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Three projects are being warned about
The Philippine authorities also mentioned three unauthorized Ponzi schemes of crypts, one of which uses a protocol based on the Bitcoin Era blockchain: Forsage, RCashOnline and The Saint John of Jerusalem Knights of Malta Foundation of the Philippines, Inc. (The Saint John of Jerusalem Knights of Malta Foundation).
According to the Securities and Exchange Commission of the Philippines, both Forsage and RCashOnline lack the necessary licenses to operate. Therefore, they are not allowed to take investments from the public or issue investment contracts or other forms of securities.
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Forsage, said the Philippines SEC, is a collective financing platform based on the Ethreum blockchain and generates active income based on the number of people referred and the membership fees that someone collects. Because it provides smart contracts, the Philippine SEC said Forsage then provides an investment contract that has to be approved by the regulator. Forsage is also not on the list of virtual crypto-currency exchanges registered with the Central Bank of the Philippines.
The Knights of Malta’s St. John of Jerusalem Foundation, although registered with the SEC, did not comply with its reporting requirements and was revoked more than 17 years ago.
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As Ponzi as you can
The three projects on which he is warning have one thing in common: they are all Ponzi schemes by nature. According to the statement, in addition to lacking the necessary licenses, Forsage’s compensation plan resembles a Ponzi scheme, where investors are paid with the contribution of new investors.
RCashOnline relies heavily on the recruitment of members in exchange for high monetary rewards rather than the sale of products.
The Securities and Exchange Commission warned that if a company’s registration has been revoked, as in the case of the Knights of Malta Foundation of St. John of Jerusalem, except for liquidation purposes, any other activity is illegal.