The Philippines Securities and Exchange Commission (SEC) has issued a warning about the Onecash Trading platform – an online cryptocurrency service, that promises 200 percent returns on investments in a time span of only eight weeks. The advisory issued by the SEC also noted the company is not registered with it.
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OneCash Trading Scam
The Philippines securities regulator decided to look into the matter after receiving reports from the public about an online unregistered trading company that promises 200 percent returns on investments.
The trading firm makes use of Facebook to generate interest through sponsored links and enroll new users on the platform at 1000 pesos ($20).
After enrollment, new members have a choice to either become “investors” with a promise to receive 25 percent return on investment every Thursday at a stretch for eight weeks, or become “builders” by inviting more members directly or indirectly and receive 50 pesos ($1) per invite up to the 10th level.
This model appears similar to classic multi-level marketing (MLM) schemes, which are particularly popular in Philippines and other parts of Southeast Asia.
SEC Cautions Ordinary Investors
After investigating the case, SEC released a cautionary notice on its website concerning OneCash. It said:
The public is hereby warned that such investment schemes whether with the use of money or virtual currencies like Bitcoin, Ethereum, Ripple, Dash, Litecoin, Monero, SIBcoin, Mooncoin and many others are considered as securities subject to the regulatory authority of this commission.
Furthermore, the securities regulator advised its citizens to stay away from such investment schemes and report if they come across similar offers.
It also asked people to inform on people who operate as “builders” for such schemes. According to the SEC’s official announcement, anyone found luring or trying to convince others to invest in the Onecash Trading scheme will face legal action under Section 20 of the country’s Securities Regulation Code.
Under Section 73, the wrongdoer will be fined 5 million pesos ($100,000) or handed 21 years of imprisonment — or both. Individuals still involved in the scheme will be held criminally liable. The names that will come in relation to such schemes will also be reported to the Bureau of Internal Revenue for further necessary action, such as taxation and necessary penalties.
The SEC advisory continued to warn against encouraging others to join, saying:
The recruitment of investor members under the guise of sponsoring a person into the system is likewise considered a form of investment solicitation or a sale of securities. The offering or sale of securities to the public without a permit or license from the commission is a violation of section 8.1 of the Securities Regulations Code (SRC).
Probe Into PBB150 Scheme
At the same time, the Philippines SEC also warned its citizens against another MLM scheme called PBB150 Trading, where there are multiple levels of recruiters in the system and each receives points as they recruit new members.
According to SEC, PBBB150 is a “4th earning system”. In this system, participants purchase digital currency called “Kringles” at 55 pesos. The PBB150 promises that the digital currency will be valued at 80 pesos in a 15 day period. To make the fake scheme look more convincing, the system limits users to only 20 Kringles per account.
The SEC stated, “The public is hereby informed that PBB150 Trading is not registered with the Commission as a corporation or partnership and is not authorized to solicit investments from the public, not having secured prior registration and/or license to solicit investment as prescribed under Section 8 of the Securities Regulation Code (SRC),”
In January this year, the securities regulator issued a cease-and-desist order against Krops, an agriculture Marketplace Crypto Equity ICO. The SEC labeled the ICO illegal as it was selling unlicensed digital token.
Lately, governments around the world have been cracking down on illegal activities and scams in the crypto market. Moreover, most authorities are working to better regulate the crypto industry in order to protect investors. The Philippines SEC is working on its own set of new rules and protections.
Is a regulated crypto market solution to scams in the crypto space? Let us know your views.
Images via Pixabay, transferwise