SEC Flags Crypto Cloud Mining Investment Scheme BitPrime

• The Securities and Exchange Commission (SEC) has issued an advisory against individuals claiming to represent “BITPRIME / BITPRIME COMPUTER SOFTWARE TRADING / ARIANE ESTOLONIO – BITPRIME SOFTWARE OPC” who are presenting themselves as a registered DTI business offering cloud mining investment opportunities.
• The SEC noted that the entity was registered as a One-Person Corporation in August 2022, but has not secured prior registration or license to solicit investments as required under the Securities Regulation Code (SRC).
• The SEC warned the public that the investment scheme offered by BITPRIME is a Ponzi Scheme and is not a registrable security.

Investing schemes leveraging on the popularity of cryptocurrency in the Philippines as well as the taking advantage of the investors desire to earn money amid the growing inflation and pandemic are still on the rise. 

In a recent advisory, the Securities and Exchange Commission (SEC) flagged another firm posing as a crypto mining company. Citing the on the reports and information gathered by the SEC, they are now warning the public against individuals or group of persons claiming to represent BITPRIME / BITPRIME COMPUTER SOFTWARE TRADING / ARIANE ESTOLONIO – BITPRIME SOFTWARE OPC. The regulator also specifically named a certain Ariane Mae Afable Estolonio for leading the entity to soliciting investments from the public.

Moreover, the Commission noted that the said entity is being presented to the public as DTI-registered with business name BITPRIME COMPUTER SOFTWARE TRADING. The entity brands itself as a cryptocurrency service in the form of cloud mining or a “Cointrust-mining company where they allegedly generate income through cloud-mining investments. 

According to the SEC, BitPrime offers five types of investments ranging from a minimal amount of ₱500 up to ₱100,000 per account with earnings as much as 45% for 15 days. In addition, it also gives a 5% referral bonus to its Team Leaders for every successful referral. The leaders also receive a weekly allowance of ₱2,500 for at least 10 active members with group sales of a minimum of ₱100,000 and royal incentives amounting to 3% of the total weekly sales.

Accordingly, the SEC noted that what BitPrime was trying to offer is an “investment contract,” which is a kind of security and under the Securities Regulation Code (SRC) offering such requires an entity to be duly registered with the Commission; the agents of the concerned entity should also have the appropriate registration and/or license to sell such securities to the public.

“Based on the Commission’s database, ARIANE ESTOLONIO-BITPRIME SOFTWARE OPC, was registered as a One-Person Corporation on 04 August 2022. However, ARIANE ESTOLONIO-BITPRIME SOFTWARE OPC has not secured prior registration and/or license to solicit investments from the Commission prescribed under Section 8 of the Securities Regulation Code (SRC),” the Commission wrote. 

In addition, the SEC also noted that the scheme being employed by the entity bears the hallmarks of “Ponzi Scheme” and schemes as such are not a registrable security.

“In view thereof, the public is hereby advised to STOP INVESTING in the investment scheme being offered by BITPRIME / BITPRIME COMPUTER SOFTWARE TRADING/ ARIANE ESTOLONIO-BITPRIME SOFTWARE OPC, and its representatives,” the SEC reminded the public. 

Recently, the Commission issued a warning to the public about people pretending to work for financial companies as there has been “a rise of reports regarding entities that pose as legitimate and reputable financial institutions scamming the investing public of their hard-earned money.” (Read more: SEC Warns Public Against Scammers Posing as Registered Entities)

Just this month, the SEC also released a draft version of the implementing rules and regulations (IRR) of the Financial Products and Services Consumer Protection Law (Republic Act 11765). Once implemented, the Commission will be able to impose stricter penalty on scammers and ponzi schemes. (Read more: STRONGER FINANCIAL REGULATIONS: SEC Issues Draft To Impose Stricter Penalty vs Scammers, Ponzi Schemes)

Moreover, the draft will also have “tokenized securities products” to be included under Section 3.1 of Republic Act No. 8799, or the SRC. (Read more: Does SEC Tag Crypto as Security Under the Financial Products and Services Consumer Protection Act?)

For more SEC articles and advisories, click here.

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