SEC Issues Warning Against Leefire Limited’s Enticing Investment Scheme
The Securities and Exchange Commission (SEC) issued an advisory and warned the public about transacting with:
- Leefire Limited
- Leefire Ph
- Leefire Philippines
And all the individuals representing the said entity. The Commission stated that Leefire is “enticing the public to invest their money” on its platform.
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“The records of the Commission show that LEEFIRE/LEEFIRE LIMITED/LEEFIRE PH/LEEFIRE PHILIPPINES is not registered with the Commission either as a corporation or as a partnership. Further, it is NOT AUTHORIZED to solicit investments from the public since it has not secured prior registration and/or license from the Commission as prescribed under Sections 8 and 28 of the SRC.” the SEC stated.
In a statement, the SEC said that Leefire is offering investments through their website or through their mobile application that is downloadable via Google Play Store.
Leefire is said to encourage investors to sign up through their personal number, after registering they will receive a cash bonus of ₱120 which can be used to buy a corresponding level of goods. Moreover, users are also promised to earn more commission and rewards through accomplishing a higher-level of task. Also, if the user is able to invite more friends, the user will earn an additional ₱120.
The Commission also noted that Leefire offers different levels of products ranging from ₱120 (Level 1) to ₱360,000 (Level 8). Levels 2 to 7 are priced at ₱500; ₱1,500; ₱4,500; ₱13,000; ₱40,000; and ₱120,000, respectively.
According to the SEC, Leefire users earn by completing a “click farm task” and for every level, the investor should complete 18 orders per day to maximize earnings for each day.
Leefire, like the other recently reported entities in SEC, are also leveraging on the growing popularity of crypto coins as it has its own coin called LFC coin.
“Assuming that the value of one LFC is PHP 1 and the user completes 18 orders per day of the level availed of, earnings accumulate to approximately 24% up to 50% on click farm task only. In addition to earnings by farm clicking, LFC coins can be earned for every successful order,” SEC wrote.
Accordingly, Leefire claims that the LFC coin is expected to launch on mainstream exchanges before 30 June 2022.
“…LFC can be exchanged for pesos at a ratio of 1:1.1 before launch on the exchange to fully realize full circulation, and it is estimated that it can be exchanged for pesos at a ratio of 1:10 or higher after launch.” – Leefire application
Further, the Commission said that for users to be able to withdraw their LFC earnings, they must first invite friends to top up any amount, which unlocks the withdrawable LFC earnings, hence releasing LFC earnings to the investor’s account. Also, the investor receives additional earnings and LFC equivalent to 15% of the friend’s top up value.
“Since Leefire/Leefire Limited/Leefire PH/Leefire Philippines is also promising its investors to receive its native cryptocurrency “LFC coin” in an apparent Initial Coin Offering (ICO), it is apt to once again remind the public that in our SEC Advisory on Initial Coin Offerings and Virtual Currencies posted 08 January 2018, an ICO is the first sale and issuance of a new virtual currency to the public usually for the purpose of raising capital for start-up companies or funding independent projects,” the SEC said, addressing Leefire’s crypto coin claims.
Further, Leefire’s investors can also earn through “Team Share,” a reward earned by inviting more investors through a referral link.
Investors can advance to higher levels by topping up the amount needed to avail of the desired level. There are two ways to top up; through mobile e-wallet Gcash; and Coin recharging, which encourages Investors to top up with stablecoin USDT (Tether) in exchange with a six (6) percent free cash when choosing this option to “recharge.”
Aside from the prior generous rewards, Leefire also promises that if the accumulated top up value of the First Level Friend reaches a minimum of ₱2,000, the user may claim additional earnings maximum of approximately 30% up to 60% for premium products per day.
“Upon further investigation, posts have been found claiming that
Leefire/Leefire Limited/Leefire Ph/Leefire Philippines plans to expand through City Partners. Aside from the earnings, commission and rewards mentioned earlier, city partners gain benefits and may earn more,” the SEC added.
The Commission stated that depending on the facts and circumstances surrounding their issuance, some of these new virtual currencies follow the nature of a security as defined by Section 3.1 of the Securities Regulation Code (SRC) whereby a person invests money in a common enterprise and is led to expect profits primarily from the efforts of others. The same goes for the LFC coin where Leefire seeks to use the money it gathered from the public to fund its purported project on the promise of profits.
“Hence, since what is being offered by Leefire are securities, Section 8 of the SRC requires that all offers and sales of said securities must be duly registered with the Commission and Leefire and/or its agents must have appropriate registration and/or license to offer and/or sell such securities to the public,” the SEC stressed.
Further, the Commission emphasized that Leefire is neither registered as a Virtual Asset Service Provider (VASP) with the Bangko Sentral ng Pilipinas (BSP) and does not have a corresponding certificate of authority as a Money Service Business (MSB) required under the Guidelines for Virtual Asset Service Providers (BSP Circular No. 1108, Series of 2021).
The SEC added that Leefire’s name also does not appear among those listed as registered MSBs as of January 2021 with the Anti-Money Laundering Council under the Anti-Money Laundering Act.
“The public is advised not to invest or stop investing in any investment scheme being offered by any individual or group of persons allegedly for or on behalf of LEEFIRE/LEEFIRE LIMITED/LEEFIRE PH/LEEFIRE PHILIPPINES and to exercise caution in dealing with any individuals or group of persons soliciting investments for and on behalf of it,” the SEC added.
As what the financial regulators reminds the public, the SEc emphasized that investors must be cautious in dealing with digital and cryptocurrency investments, (Read more: SEC Advises Public to be Cautious on Crypto Investments)
This year, the Commision already flagged and warned the investing public against eight crypto trading and play-to-earn entities; YDYS Trading, MetaProfit, Autotrade International, Crypto Asset, CryptoStakers, CryptoPayz, Future Farming, and Outrace Play-to-earn.
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