The Securities and Exchange Commission of the Philippines (SEC) has issued an advisory against Xian Gaza, the self-proclaimed “pambansang scammer”, and the entities promoting and encouraging investors to purchase or buy Xian Coin “XNC,” the cryptocurrency by Gaza, which promises “high price stability” and appreciation.
The SEC said that upon investigation, Xian Gaza is a centralized digital currency that is “exclusively traded by its coin holders.” It is owned and issued by a “virtual crypto bank” where investors can exchange their coins to Xian Coin. Xian Coin claims to be a superior form of money that will create a “powerful, unregulated, and untraceable financial payment system.”
Investors who would want to invest in Xian Coins must go through some complicated process that involves downloading another wallet and sending their NAME and HOMETOWN to the NYEAM VLOGS Facebook page. The investor would have to wait for their NAME and HOMETOWN to be posted in the comment section, and only by that time are they allowed to message the ADMIN for their GCash Account or Bank Account details.
The SEC said that Xian Coin being centralized and offered to the public with the promise of price appreciation made it subject to the regulatory authority of the Commission. An investment contract also exists because the investor is expected to receive profits derived from the effort of others.
“Hence, investment of money in Xian Coins pooled by Xian Gaza, motivated by expectation of profits generated from their supposed price appreciation from the promotional effort of Xian Gaza, constitute an investment contract,” the SEC said in a statement.
“The US SEC in its investigative report in “The DAO” case, said that “securities law may apply to various activities, including distributed ledger technology, depending on particular facts and circumstances, without regard to the form of the organization or technology used to effectuate a particular offer or sale,” the SEC stated further.
Hence, the SEC warns the public that Xian Gaza and the other promoters of Xian Coin are “not authorized to solicit, accept, or take investments/placements from the public nor to issue investment contracts and other forms of securities defined in the country’s Securities Regulation Code (SRC) in the Philippines.”
The Commission also said that Xian Coin (the company and/or group) is not registered as a Virtual Asset Service Provider (VASP) with the Bangko Sentral ng Pilipinas (BSP).
Furthermore, the SEC also said that the following RED FLAGS indicate that Xian Coin is an elaborate ponzi scheme:
- Gaza, more popularly known as the “pambansang scammer” boasted that the money from Xian Coins will be used to finance his underground activities.
- Gaza also said in his videos that he is the sole issuer of Xian Coin and that the coin is centralized, pre-mined — its supply is controlled by him.
- Xian Coin does not have a whitepaper which every other important project in the digital currency space always has.
- SEC said Xian Coin does not have a working model.
- Gaza heavily promotes the coin on his Facebook account, even posting the amount of money that investors put into buying the coin.
- Xian Coin is not registered and traded in recognized cryptocurrency exchanges. SEC also said Xian Coin has no usecase, contrary to Gaza’s claims.
- Xian Coin is not a registered VASP and it has no permit to offer and sell securities.
The Commission warns of heavy penalties to 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 is advising the public not to invest or stop investing in anything related to Xian Coin or its promoters.
Check the SEC advisory here.
This article is published on BitPinas: SEC Issues Advisory Against Xian Gaza, Xian Coin