The Philippines securities regulator has issued a public warning against a block reward cloud mining company that it claims is a pyramid scheme. Known as Mining City, it promises returns of up to $92 daily, paid out in Bitcoin Vault tokens.
The Philippines Securities and Exchange Commission (SEC) warned the public against investing in Mining City, claiming that the company is not registered to offer its services in the Philippines.
“Mining City is not registered with the Commission and operates without the necessary license and/or authority to solicit, accept or take investments/placements from the public nor to issue investment contracts and other forms of securities,” the regulator stated in a press release.
The company is also not registered to offer its services under the Guidelines for Virtual Currency Exchanges issued by the Bangko Sentral ng Pilipinas, the SEC said. These guidelines require all entities engaged in digital currency activities to obtain a Certificate of Registration.
The SEC further alleged that the company could be a scam.
“Moreover, the said scheme employed by Mining City clearly shows indication of a possible Ponzi Scheme where monies from new investors are used in paying ‘fake profits’ to prior investors.”
Mining City is a cloud mining company that reportedly pools together funds from its investors and channels it towards block reward mining. It offers different plans, with the most basic starting off at $300 for 3 TH/s and the Platinum plan costing an investor $12,600 for 138 TH/s. All plans run for 1,100 days and start after 10 days, the company’s website states. Payment is done in BTC.
Mining City is owned by Prophetek Ltd., a company owned and operated by Gregory Rogowski. The SEC also listed two other individuals, Anthony Aguilar and John Grey, who have been highly involved in the marketing activities for the firm in the Philippines.
The company is closely linked to Bitcoin Vault (BTCV), a digital currency created by Warsaw, Poland-based mining firm MineBest. Mining City’s CEO Rogowski also previously served as the vice president of marketing at MineBest. This close relationship sees Mining City pay out its investors in BTCV tokens.
As per CoinMarketCap data, BTCV has been around since April this year. Its price spiked from $23 in April to an all-time high of $485 in early August. It then plummeted before making a slight recovery in the past week to $166 at press time.
The SEC cautioned salesmen, brokers, dealers and agents promoting Mining City that they stand criminal prosecution for their actions. They face 21 years behind bars, a $100,000 penalty or both if convicted.
According to Alexa, Mining City is most active in Japan where over half of its website visitors are from. South Korea and Vietnam are the other countries it has managed to attract an audience. Despite the multi-state presence, the company hasn’t provided any evidence that it’s registered in any of these jurisdictions.
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