SEC Issues Public Warning Against Winvest and its Investment Scheme

• The Securities and Exchange Commission (SEC) has issued a public warning against Winvest and its founder Darwin Sarte for operating illegally and being involved in a Ponzi scheme.
• The SEC has noted that Winvest is not registered with the Commission and is not authorized to solicit investments from the public.
• The SEC has advised the public to stop investing in Winvest and has taken steps to strengthen regulation with a new draft of the Financial Products and Services Consumer Protection Law.

The Securities and Exchange Commission (SEC) recently published a warning to the public to be cautious with the entity Winvest as well as with individuals or groups of persons claiming to represent it; especially a certain Darwin Sarte, the founder and head of Winvest.

In a statement, the Commission noted that the entity claims to earn profit through Binance Futures Trading. 

According to its website, Winvest offers two types of investments to the public ranging from a minimal amount of ₱500 up to ₱100,000 per account. The entity promises earnings as much as 3.5% for 14 days. Aside from big returns, investors are also enticed to earn more through Direct Referral Bonus and Unilevel Bonus.

Accordingly, the SEC highlighted that the offers of Winvest take the form of an “investment contract”—that exists when there is an investment or placement of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others. Therefore, the Commission reminded that as per the Securities Regulation Code (SRC), entities offering investment contracts are required to be duly registered and that the concerned entity and/or its agents should have the appropriate registration and/or license to sell such securities to the public. 

“Based on the Commission’s database, WINVEST 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 Commission stressed. 

In addition, the scheme being employed by the entity is also noted to be clearly a form of a Ponzi Scheme—a type of fraud that lures investors and pays profits to earlier investors with funds from more recent investors.

“The offering and selling of securities in the form of investment contracts using the “Ponzi Scheme” which is fraudulent and unsustainable,  is NOT 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,” the SEC pointed out. 

Consequently, the Commission advised the public to stop investing in Winvest and its investment scheme.

Recently,  the SEC released a draft version of the implementing rules and regulations (IRR) of the Financial Products and Services Consumer Protection Law (Republic Act 11765) which will give the Commission the ability to impose stricter penalties on scammers and Ponzi schemes once implemented. (Read more:  STRONGER FINANCIAL REGULATIONS: SEC Issues Draft To Impose Stricter Penalty vs Scammers, Ponzi Schemes)

Moreover,  to conduct joint research and capacity-building projects focusing on cryptocurrency and financial technology regulation, the Commission also signed a memorandum of understanding (MoU) with the University of the Philippines Law Center (UPLC) through the University of the Philippines Legal Center Research Program. (Read more; SEC Partners with UP Law Center for Joint Research on Crypto, Fintech Regulations)

For more SEC articles and advisories, click here.

This article is published on BitPinas: SEC Issues Public Warning Against Winvest and its Investment Scheme

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