The Securities and Exchange Commission (SEC) released an advisory to the public to be cautious when transacting with people soliciting investments for and on behalf of BCPay Financial Technology Inc (BCPAY Inc.) which are now doing business under the name OUTRACE “Play to Earn” and are again soliciting investments in the Philippines without license and authority from the Commission.
SEC also emphasized that OUTRACE is not 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).
“Our records also show that OUTRACE does not have any brokers, account managers, agents, and/or representatives that have appropriate registration and/or license to offer and/or sell such securities to the public,” the commission stated.
According to the Enforcement and Investor Protection Department of the commission, “OUTRACE promises desirous earnings for its players and OUTRACE ($ORE) token holders alike by acquiring its in-game non fungible tokens or NFTs on presale and purchasing $ORE beforehand through Initial Coin Offering (ICO) at a significantly low price on the pretext that both will considerably increase in value once the $ORE is listed on public exchanges. For better appreciation, below is the $ORE’s purported tokenomics as bolstered by OUTRACE which deems to be “too good to be true.””
The Commission further stressed that the scheme follows the 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 SEC points out that “this is in the same vein with the $ORE by OUTRACE whilst utilizing the NFT platform as part of its scheme in order to gather funds from the public to support its dubious project on the promise of lucrative return.”
“OUTRACE is capitalizing on the current popularity and pliancy or flexibility of the NFT application which is now being devised by many as an investment platform as well akin to those conventional mediums of pooling capitals by allowing users to buy, sell, and hold an array of funds or investments therefrom in the guise of in-game characters, boosters, commodities, and various digital assets and currencies,” the SEC wrote in a statement.
Further, the public is reminded by the securities commission to be cautious of any offer or promise of ridiculous rates of return with little or no risk similar to what OUTRACE is offering as it is an indication 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 companies’ profits similar to those already flagged by the Commission as scams.
“The Commission is eagerly reminding the public that the offering and sale of securities in the form of investment contracts using the “Ponzi Scheme” is fraudulent and unsustainable and is Not a registrable security. The Commission will not issue a License to sell securities to the public, to persons, or entities that are engaged in this business or scheme,” they added.
Lastly, SEC suggests for everyone to practice due diligence when engaging with any entity and is warned that strict penalties are imposed for violations of the Securities Regulation Code, the Revised Corporation Code, and such other rules and regulations enforced by the Commission.
This article is published on BitPinas: SEC Issues Advisory Against “Outrace Play-to-earn”