Philippines SEC issues consumer warning versus digital assets-related investment scheme ‘Paynance’

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The Securities and Exchange Commission (SEC) of the Philippines has issued a consumer advisory urging the public not to invest or stop investing in an online investment platform called Paynance.

Per the notice published by the SEC’s Enforcement and Investor Protection Department, the company, which is registered with the Department of Trade and Investment (DTI) as Paynance Foreign Exchange Services, has been enticing the public to invest a minimum of PHP500 (around $9) to earn 8% daily returns for 25 days.

The company has other investment plans where the investors can lock up PHP10,000 (~U.S.$180) to earn 20% returns daily for 15 days or lock up PHP5,000 (~U.S.$90) for 12 days to earn 10% daily returns. The platform claims it makes the return it pays from trading digital assets and forex.

However, the securities regulator has said that the entity is not registered under the Securities Regulation Code (SRC), making its offering an unregistered security. The notice read:

“The records of the Commission show that PAYNANCE/ PAYNANCE FOREIGN EXCHANGE SERVICES is not registered with the Commission either as a corporation or as a partnership. Further, it is NOT AUTHORIZED to solicit investments from the public since it has not secured prior registration and/or license from the Commission as prescribed under Sections 8 and 28 of the SRC.”

Added to advising the public not to invest in the scheme, the SEC also stated that entities acting as salesmen, brokers, dealers, or agents for the company may be prosecuted. If found guilty, they will be liable to pay fines of up to five million pesos or serve up to 21 years in prison, or both.

The warning adds that investors encouraging others to join the scheme may also be held criminally liable.

Philippines’ SEC cracking down hard on digital assets scams 

The warning is the latest the regulator has issued concerning an unregistered digital assets-related scheme. In June, it warned the public of Astrazion, a digital assets-themed investment project that is accused of fraud.

The platform was also ordered to cease and desist from making any offerings to investors. Previously, the SEC had also posted public advisories against Sengre, which was selling the SGC Coin, and Leefire, which was conducting an initial coin offering (ICO).

The commission may soon turn its attention to the activities of Binance, the biggest exchange globally by trading volume. Advocacy efforts, including from Infrawatch PH—a think tank, have urged the SEC to act against Binance as the exchange is operating in the country without a license, as well as offering questionable investments.

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