SEC Issues Advisory Against AlgoSCALP’s “Enticing” Investment Scheme
The firm uses “scalping”—a trading style that specializes in profiting off of small price changes and making fast profit from reselling.
In a recent advisory, the Securities and Exchange Commission (SEC) has warned the public about transacting with people or groups soliciting investments for and on behalf of AlgoSCALP, an automated trading system. The Commission stressed that AlgoSCALP doesn’t have the license and authority from the SEC to solicit investments from the public.
“AlgoSCALP, AlgoSCALP Trading, or AlgoSCALP Auto Trading claims that it is a fully automated trading system, and that the provider will place buy and sell orders for the investor, allowing the investor to trade the financial markets without needing to lift a finger,” the SEC wrote.
The firm uses “scalping”—a trading style that specializes in profiting off of small price changes and making fast profit from reselling, according to the SEC. AlgoSCALP offers an enticing offer to invest with a minimum amount of P200, with an assurance of a daily profit range of 1% to 13% for 22 days. An investor can also earn through direct referral of “active trade.” In every active trade, an investor earns a 12% commission.
The SEC tagged the firm’s offer as “too good to be true,” with indications of a possible Ponzi scheme where returns to early investors are likely to be paid out from the investments of new investors and not out of the company’s profits.
Moreover, as stated by the SEC, the firm also claims that it is a cryptocurrency of the Algorand Blockchain that aims to be “simultaneously scalable, secure and decentralized.” The SEC pointed out that Algorand blockchain and its cryptocurrency are not registered as a Virtual Asset Service Provider (VASP) with the Bangko Sentral ng Pilipinas (BSP) and do not have a corresponding Certificate of Authority as a Money Service Business.
“Our database also shows that AlgoSCALP has no brokers, account managers, agents, and/or representatives that have appropriate registration and/or license to offer or sell such securities to the public,” the SEC said.
The SEC reminded the public that unregistered or unauthorized platforms are risky and should be avoided.
“Therefore, the public is advised to not invest or (to) stop investing in AlgoSCALP or in any other scheme being offered by it no matter how enticing, trendy, or catchy its slogans, proposition, or scheme is,” the SEC said.
By the first quarter of the year the SEC already flagged and warned against four crypto trading entities; Crypto Asset, CryptoStakers, CryptoPayz and Outrace Play-to-earn.
Again and again, the SEC emphasized that the investors must be cautious in dealing with digital and cryptocurrency investments, he stressed this during the webinar organized by the Philippine Stock Exchange last January 30. (Read more: SEC Advises Public to be Cautious on Crypto Investments)
Further, the BSP and SEC also mentioned during BSP’s Cryptocurrency 101 virtual conference last year that they do not encourage people to invest in cryptocurrency and the public must do their own due diligence before engaging. (Read more: BSP, SEC Do Not Encourage the Public to Invest in Crypto)
This article is published on BitPinas: SEC Issues Advisory Against AlgoSCALP’s “Enticing” Investment Scheme
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