Philippine SEC Raises Concerns Over Proliferating Crypto Ponzi Schemes

The Philippines have seen a growing number of crypto-related crimes in the past, and now the Philippines are taking note of it. On July 1, the Securities and Exchange Commission (SEC) of the Philippines published a Press Release on its website to create awareness of the fraudulent crypto investment schemes going around in the country.       

The SEC also has names three companies that are operating illegally and offering unsanctioned investments. SEC has not provided these companies licenses to operate or to offer any investment products. The three companies are Forsage, RCashOnline, and also the Saint John of Jerusalem Knights of Malta Foundation of the Philippines Inc. Forsage is a crowdfunding company that offers income based on the memberships and referrals through its participants. According to the SEC, the company needs to have prior approval before offering any smart contracts to the public. Even RCashOnline offering similar contracts should be offering any investment product without obtaining the necessary licensing.

The Saint John of Jerusalem Knights of Malta Foundation of the Philippines Inc does have regulatory approval, but they are not complying with the requirements provided to them. It has led them to have their license revoked, but still, they continue to defy the rules and operate illegally for 17 years. Forsage and RCashOnline both operate on pyramid schemes where the participants have to recruit other people to earn money. Saint John, on the other hand, is defying SEC rules and operating even after revocation of its license. Even though SEC has not made any arrests till now, it has issued a warning to them that anyone who violates their rules will face a huge fine and 21 years in prison or both. In the Press Release issued by SEC, anyone caught acting as a broker, salesperson, agent, or dealer with these three companies would have to pay a maximum fine of P5 million or face imprisonment up to 21 years or both.    

It seems that the Philippines are fighting off a number of crypto scam efforts in the past years. In April 2020, the SEC has warned about another crypto company with the name The Billion Coin. It has been operating for a few years in the country and was the third company that was flagged by the institution that month. Then, the next month the Filipino Ministry of Finance alerted its citizens about Bitcoin Revolution, another fraudulent Ponzi scheme that used the Filipino President Rodrigo Duterte and Secretary of Finance Carlos Dominguez III to promote themselves. The company claimed that the government created the assets and urged citizens to invest in them.

The statement issued by SEC further stated that any unauthorized and illegal investment schemes, like the ones mentioned above, are being monitored by them and is ready to take legal and regulatory action against them. It has been doing its part to prevent citizens from falling into the traps of these Ponzi schemes. It also asked the citizens to be more alert and avoid quick-money schemes as most of the people end up losing their hard-earned money due to them.

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