Philippines SEC flags Platinum Coin Pawnshop over illegal investment scheme

The Securities and Exchange Commission (SEC) in the Philippines has issued a cease and desist order for Platinum Coin after it allegedly violated provisions of the country’s capital market laws with its Pawnshop offering.

The SEC gave the order in a motion instituted by the Commission’s Enforcement and Investor Protection Department (EIPD). The order bars Platinum Coin from offering securities to the public until the firm obtains proper registration with the SEC.

Platinum Coin has been leveraging social media to sell unregistered securities to the public, promising up to 50% returns in 30 days. SEC’s investigation revealed that the firm masks its illegality by issuing post-dated checks to investors and entering into “legal” agreements.

The SEC alleged that Platinum Coin failed to obtain relevant licenses to conduct lending business or offer brokerage services. Documents from the Market and Securities Regulation Department (MSRD) and the Corporate Governance and Finance Department (CGFD) were presented as supporting documents for the SEC’s claim.

“This finding is supported by the fact that Platinum Coin represents itself to be a lending company but it does not have the requisite license from the Commission to engage in the lending business,” an excerpt from the order read. “This is fraud, plain and simple.”

Rather than seeking registration, Platinum Coin took to its Facebook account to present falsified business permit documents violating the country’s rules. In February, the SEC issued a public advisory against the firm on the grounds that its activities have striking similarities to a Ponzi scheme and urged investors to avoid sinking funds on the platform.

By virtue of the cease and desist order, promoters and agents of the firm are precluded from advertising the sale of securities linked to the platform. The SEC confirmed that it would institute legal action on individuals engaged in promotional activities relating to Platinum Coin.

SEC turns up the heat

The SEC has been heightening its local digital currency industry monitoring by ensuring industry players obtain proper registrations before operating in the country. The securities regulator has also taken a hands-on approach through the litany of public advisories issued against erring firms to protect investors.

In early April, the SEC turned down the application of Lyka Gem tokens for failing to comply with registration requirements. The Philippines’ Anti-Red Tape Authority (ARTA) upheld the SEC’s decision with the body noting that proper disclosures are necessary to obtain the SEC’s consent.

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