November 19, 2019 – The Philippines Securities and Exchange Commission Enforcement and Investor Protection Department has issued an advisory against COINDEORO HOLDINGS, INC./COIN DE ORO for enticing the public to participate in illegal investment schemes/
SEC claims the following activities as part of COIN DE ORO’s compensation plan 1) Direct Referral (5% from investments made by direct referrals), 2) Unilevel Marketing (1% from investments made by indirect referrals) & 3) Coin De Oro Holder Incentive (50% earned from direct referrals converted to Coin De Oro cryptocurrencies). These Coin De Oro cryptocurrencies can be traded via the “CoinDeOro Platform” accessible to investors through personal accounts.
“Simply, an investor is entitled to receive passive income from the pool of investment traded as Coin De Oro cryptocurrency, while active income is acquired from recruitment bonuses.”
Virtual currency is a sensitive topic to the SEC, as it deems that those issued (or those virtual currencies that undergone a token sale) could be classified as securities as defined by the Securities Regulation Code (SRC). Therefore such securities must be registered with the SEC and there must be proper disclosure when it comes to the company’s nature of the business, people behind the team, etc. Check out BitPinas’ article on SEC Draft Rules on Initial Coin Offerings.
SEC also said that some companies who claim to trade and issue virtual currencies are just scams – Ponzi Schemes – where money from new investors are used as fake “profits: given to the earlier investors.
Finally, SEC said COIN DE ORO is only registered as a holding company and is not authorized to solicit investments because it does not have the necessary secondary license to do so. Anyone acting on behalf of Coin De Oro, whether through selling or convincing people to invest will be prosecuted and held criminally liable with a maximum penalty of Php 5 million or up to 21 years of imprisonment. The names of all those involved will be reported to the Bureau of Internal Revenue (BIR).
SEC most recently issued an advisory regarding PAYASIAN, another company without the secondary license to secure investments from the public.
A hearing in the Senate led to the formulation of a cryptocurrency task force, led by the Bangko Sentral ng Pilipinas (BSP) to study the cryptocurrency space so that the country can come up with better regulations.
Read the SEC advisory here.
This article is published on BitPinas: Philippines SEC Advisory on Coin De Oro