The Securities and Exchange Commission of the Philippines (SEC) has issued advisories against six firms for operating without the necessary license and authority to solicit investments from the public and to sell unregistered investment contracts.
The SEC said that upon investigation, it has found that the public is being encouraged by numerous individuals to invest in the following entities: Learn and Earn Online, 247 Cryptotrading FX, 247 Cryptotrade Online, ExchangeStock, Binary Options Trading, and Wolves Options; all of which do not have licenses to solicit investments. The SEC advises the public to stop investing on these schemes.
On Learn and Earn Online, the Commission said the entity is headed by entities with fake names and profiles operating from Kenya. It acts as trading broker for the other entities flagged by the SEC, which claim to be operating from the UK.
The Commission further said that the entities encourage investors by promising guaranteed returns between 18% to 1,000% every week. Such promises are “too good to be true” and have all the basic indicators of a possible “Ponzi Scheme”, wherein new investors are actually the one paying the returns of early investors instead of actual company revenue. The SEC emphasized that Ponzi Schemes are fraudulent, unsustainable and a form of security that will never be allowed registration with the Commission. The SEC also said an “investment contract” exists when money is invested or placed in a common enterprise with expectation of profits derived from the effort of others.
Thus, the SEC warns the public that these entities are “not authorized 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) in the Philippines.” The Commission also said none of the operators nore the agents have licenses to offer securities to the public as well.
The SEC’s records also show that the entities manage their digital exchange platforms without registering them to the Commission relative to SRC’s Section 32: Prohibition on Use of Unregistered Exchange.” The entities are also not licensed by the Bangko Sentral ng Pilipinas (BSP) to operate as a virtual asset service provider under BSP Circular No. 1108 Series of 2021 or the “Guidelines for Virtual Asset Service Providers.”
The Commission warns of heavy penalties tho those acting as salesmen, brokers, dealers, or agents of these unauthorized entities; they may be criminally prosecuted and penalized with a maximum of five million pesos or be jailed for up to twenty one years. SEC said they will report the names of individuals involved with the scheme to the BIR.
Finally, the Commission reiterates that issuance of Certificate of Incorporation does not grant any entity to solicit investments to the public, as that undertaking requires separate licenses from the SEC.
The SEC also remarked that the laws cited in the advisory are not aimed to hinder or pose significant risk to businesses and cryptocurrency projects but merely to protect both the registered entities and the public from any irregularities arising from unauthorized operations.
BitPinas strongly encourages all readers to heed the advice of the SEC in these matters.
This article is published on BitPinas: SEC Issues Advisories Against 247 Cryptotrade Online, Wolves Options, Etc