The Securities and Exchange Commission, or SEC, has just stated that Cryptostakers, or Crypto-Stakers.com, is persuading the public to deposit a minimum of PHP 1,000 with the promise of an 8% daily dividend for 25 days or a 100% return on investment in 25 days. This follows the Commission’s announcement that Cryptostakers lacks the essential license and/or authority to solicit, accept, or receive public investments/placements, as well as to issue investment contracts and other types of securities as defined by Section 3 of the Securities Regulation Code (SRC).
Furthermore, Cryptostakers’ scheme appears to be a possible Ponzi Scheme, in which new investor funds are used to pay fictitious profits to prior investors, and is designed primarily to benefit its top recruiters and prior risk takers, while being detrimental to subsequent members in the event of a scarcity of new investors.
A registrable security is one that is offered and sold in the form of a Ponzi Scheme, which is fraudulent and unsustainable. Persons or entities engaging in this type of activity or plan will not be granted a License to Sell Securities to the Public by the Commission.
The SEC warns that those who invite or recruit others to join or invest in this venture, or who offer investment contracts or securities to the general public, may be held criminally liable under Section 28 of the SRC, which carries a maximum fine of PHP 5,000,000 and a maximum sentence of 21 years in prison, or both (SEC vs. Oudine Santos, G.R. No. 195542, 19 March 2014).
The Commission reiterates its Advisory on “Dealing with Non-Registered Foreign Entities Organizations and Corporations” in dealing with these unregistered entities. As a result, the general public is urged not to invest in or refrain from investing in any investment scheme offered by the aforementioned entities/individuals.
If you have any information about the subject’s operation, please contact the Enforcement and Investor Protection Department at 8818-6047 or send a report to epd@sec.gov.ph.