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Another day, another opportunity for scammers to use cryptocurrencies to hide their fraudulent acts.
This time, the Securities and Exchange Commission (SEC) has caught WebMining, a mobile application and website, for offering securities in the form of investment contracts to the public.
On its public advisory, the Commission found out that there are individuals or groups of persons claiming to represent and operating under the name “WEBMINING,” enticing the public through social media to invest in “WEBMINING.”
As per the regulatory agency, WebMining is offering six types of investment plans on its mobile app that are worth ₱500.00 each. The entity then promised its investors a profit of ₱3,750.00 for 120 days, ₱5,750.00 for 210 days, and ₱10,950.00 for 365 days.
“Briefly, an ‘investment contract’ exists when there is an investment or placement of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others, which is prominent in the scheme of ‘WEBMINING,’” the SEC clarified.
Currently, there is a Facebook Group named “WEB MINING OFFICIAL,” its cover photo is the logo of WebMining and it has 214 members, 78 are newly joined this week.
Entities that offer and sell securities in the form of investment contracts are required to have a registration from the Commission, as per the Securities Regulation Code (SRC). All the individuals, agents, and representatives of that entity must also have the appropriate license to sell and offer such products. This is where the regulatory agency has also found out that WebMining is an unregistered entity in the country, and no agents involved in the app are also licensed.
“Based on the Commission’s database, “WEBMINING” is NOT REGISTERED as a corporation or partnership and OPERATES WITHOUT THE NECESSARY LICENSE AND/OR AUTHORITY to solicit, accept, or take investments/placements from the public nor to issue investment contracts and other forms of securities defined under Section 3 of the Securities Regulation Code (SRC),” the Commission emphasized.
Further, the SEC also tagged WebMining’s investment scheme as a Ponzi scheme, which uses the money invested by the newly-entered investors to pay the older investors’ profits. As per the regulatory agency, a Ponzi scheme is a fraudulent and unsustainable scheme and is not a registrable security.
“In view thereof, the public is hereby advised NOT TO INVEST or to STOP INVESTING in the investment scheme being offered by individuals or groups of persons claiming to represent ‘WEBMINING’ as well as to any other entities having the same or similar schemes, and to exercise caution in dealing with any individuals or groups of persons soliciting investments or recruiting investors for and on behalf of “WEBMINING,” the Commission concluded.
Lastly, pursuant to Section 28 of the SRC, salesmen, brokers, dealers or agents, representatives, promoters, uplines, recruiters, influencers, endorsers, and enablers of WebMining that offer or sell the products they have can be held liable and be penalized with a maximum fine of ₱5,000,000.00, or imprisonment for a maximum of 21 years, or both.
The Commission also said that the names of all those involved will be reported to the Bureau of Internal Revenue (BIR) so that the appropriate penalties and/or taxes can be correspondingly assessed.
Just last week, the regulatory agency warned the public against unlicensed entities that offer securities in the form of investment contracts. It reminded the general public to practice deep research before investing in something. Offering investment contracts requires a secondary license from the SEC itself.
This article is published on BitPinas: 500 MO GAWIN NATING 10K: SEC Flags Down WebMining App for its Unlicensed Investment Scheme, Tags as Ponzi
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.