The Securities and Exchange Commission (SEC) of the Philippines has warned the public against unauthorized crypto investments and trading.
It has been reported that the Philippine SEC warned those who were involved in crypto schemes could face a fine or 21 years of imprisonment or both.
It explained:
“A maximum fine of P5 million or imprisonment of 21 years or both await those who act as salesmen, brokers, dealers or agents of entities engaged in unauthorized investment schemes[…] The Bayanihan to Heal As One Act, also punishes those participating in cyber incidents that make use or take advantage of the current crisis arising from the COVID-19 outbreak to prey on the public through scams, phishing, fraudulent emails, or other similar acts.”
However, the Philippine authorities also listed three unauthorized crypto Ponzi schemes, one of which uses a protocol based on Ethereum blockchain: Forsage, RCashOnline, and The Saint John of Jerusalem Knights of Malta Foundation of the Philippines, Inc.
The Philippine SEC said that both Forsage and RCashOnline lack the necessary licenses to operate, as they are not allowed to take investments from the public or issue investment contracts and other forms of securities.
Philippine SEC warns against three Ponzi schemes, including an ETH crowdfunding platform called Forsage https://t.co/OZkGD7AlI7 — Cointelegraph (@Cointelegraph) July 5, 2020
Also, the Philippine SEC said that Forsage is a crowdfunding platform based on the Ethereum blockchain and active income is generated depending on the number of referrals and membership fees someone gathers. Since it provides smart contracts, the Philippine SEC noted Forsage then provides an investment contract that has to be approved by the regulator.
Forsage is also not in the list of virtual currency exchanges registered with the Philippine central bank.
Though Saint John of Jerusalem Knights of Malta Foundation was registered with the SEC, it did not comply with its reportorial requirements and was revoked over 17 years ago.
As per the report, all three warning projects have one thing in common: they are Ponzi schemes by nature.
According to the statement, other than lacking the necessary licenses, Forsage’s compensation plan resembles a Ponzi scheme, where investors are paid using the contribution of new investors.
RCashOnline relies heavily on recruiting members in exchange for high monetary rewards rather than on selling products.
Thus, the SEC warned that if a company’s registration has been revoked, such as Saint John of Jerusalem Knights of Malta Foundation, other than for the purpose of liquidation, any other activities are illegal.
Source: Cointelegraph | Image: Entrepreneur