Philippines SEC new public warnings target 3 firms allegedly disregarding security rules

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The Securities and Exchange Commission (SEC) of the Philippines has issued public advisories against the activities of several digital asset services providers, specifically for offering unregistered securities in the country.

The firms mentioned in the warnings include Bit-Cryptorising Marketing Consultancy, BCR Rising Trade Inc., and Lele Gold Farm, operating under the moniker Lele Gold Coin. According to the securities watchdog, the entities were engaged in the illegal solicitations of investments from the public through social media.

The SEC noted that Bit-Cryptorising Marketing Consultancy’s offer of 120% returns in 60 days to investors amounted to a contravention of section 3.1 of the Securities Regulation Code, which requires investment contracts to be registered with the commission. Although BCR Rising Trade Inc. had obtained registration with the SEC, the agency ruled that it needed a secondary license to sell securities to the public.

“As such, the Securities Regulation Code (SRC) requires that said offer and sale of securities must be duly registered with the Commission and that the concerned entity and/or its agents should have the appropriate registration and/or license to sell such securities to the public,” the warning read.

On the other hand, the SEC pointed out that Lele Gold Farm operated as a Ponzi Scheme in addition to failing to register its investment contract. The securities watchdog said that the firm used the funds from new investors to pay old investors, a move which could be disastrous in the event of dwindling new investors.

“The offering and selling of securities in the form of investment contracts using the ‘Ponzi Scheme’ which is fraudulent and unsustainable is NOT a registrable security. The Commission will not issue a License to Sell Securities to the Public to persons or entities that are engaged in this business or scheme,” the SEC said.

The commission went on to warn Filipinos to avoid investing in the virtual currency offerings, with the firm’s brokers told to desist from promotions or face up to 21 years in jail.

The Philippines’ SEC tries to sanitize the system

Throughout 2022, the Philippines’ SEC has been at the forefront of policing the virtual currency industry from bad actors with a barrage of advisory warnings against erring firms. The commission issued over 80 warnings against companies soliciting investments in their unregistered securities in 2022.

Aside from merely issuing warnings, the commission bared its fangs by carrying out enforcement actions against firms in flagrant violations of warnings. It carried out raids with law enforcement agencies across the country while its prosecutors had a field day in court against defaulters.

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