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SEC raises warning vs. cryptocurrency entity

The Securities and Exchange Commission (SEC) has raised another warning against an entity that has presented itself as a cryptocurrency program after the latter refused to heed an earlier order that it stop soliciting investments from the public.

In its June 16 advisory, the SEC called on the public to stop investing in Bitcoin Revolution, an entity that was allegedly endorsed by some government officials, investors and celebrities, as it did not have a secondary license to engage in such business transactions.

The warning did not only cover the entity, using the domain bitcoinrevolution.com, but others that have “engaged in digital asset trading and promising ridiculous rates of return with little or no risk.”

“The public must be mindful that cryptocurrencies are very volatile and the process of digital asset trading is highly speculative and involves a higher degree of risk and that the operations of such unregulated entities engaged in digital asset trading are completely unaccountable,” the SEC noted.

“Nevertheless, the Commission assures the public that it continuously monitors and oversees such entities and their activities in a way that it sees as proper in order to prevent the proliferation of scams and/or any other unauthorized or illegal schemes in the country,” it added.

The agency warned that those involved in the operations of the entity may be liable for violating the Securities Regulation Code and could face a maximum fine of P5 million or imprisonment of 21 years or both, depending on the discretion of the court.

They may also be liable for violating the Bayanihan to Heal As One Act, penalizes those participating in cyber incidents that make use or take advantage of the COVID-19 crisis to prey on the public through scams, phishing, fraudulent emails, or other similar acts with two-month imprisonment or a maximum fine of P1 million or both.

“[T]he above laws are not aimed to hinder or pose significant risk to businesses and cryptocurrency projects but are intended for the protection of both the registered entities and the investing public from any anomalies and/or irregularities which tend to result from any unlawful or unauthorized operations,” the SEC noted.

The Commission encourages the public to visit the SEC website to see the advisories it issues regularly and to report unauthorized investment solicitation activities to the SEC Enforcement and Investor Protection Department through email at epd@sec.gov.ph.

The agency, which first issued an advisory to the public on the entity on March 30, said the entity has promised that investors, for an investment of $250, can earn as much as $1,000 during that day or 9,000% monthly.

The entity also claimed that its traders have become millionaires in just two months and that the success rate of its transaction is 99% due to its unique trading system.

The entity offers the investors investment contracts, which the agency flagged as securities and that entities are not required anything to earn income. These instruments, the agency added, are defined as securities under Republic Act No. 8799, or The Securities Regulation Code.

The agency added that aside from not being able to secure licenses, the offer of “quick and unrealistically high return promised by Bitcoin Revolution presents a red flag for a Ponzi scheme, an investment scam where investors are paid using funds contributed by the succeeding investors.”

Despite the previous advisory, the agency said the entity has continued to seek investments from the public even as it has failed to secure the legal instruments that would have allowed it to continue with its investment scheme even as it has not also secured any registration from the Bangko Sentral ng Pilipinas based on BSP Circular No. 944, Series of 2017, which provides for the Guidelines for Virtual Currency Exchanges.

On endorsement from prominent personalities, the agency also found out that there was no truth that these personalities, among them Sen. Manny Pacquiao, former senator and billionaire Manuel Villar and television host Boy ABunda, endorsed its activities.
Even the Department of Finance alerted the public about the fake endorsement of its secretary to supposedly promote Bitcoin Revolution.

On May 19, the DOF even issued a warning against those entities that were into cryptocurrency trading, one of them was Bitcoin Lifestyle who even claimed that President Rodrigo Duterte was supporting it.

The agency urged the public to visit its website for advisories on companies and that if they find irregularities should report these activities to the SEC Enforcement and Investor Protection Department through email at epd@sec.gov.ph.

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