The Securities and Exchange Commission (SEC) has recently issued an advisory (as seen below) on CRYPTOPESO, warning the public of the individuals and groups involved in such activities. The advisory defines the activities behind the scheme, and advises the public to not to invest or stop investing in any investment scheme offered by the said company.
In support of this view, Coins.ph does not endorse or is affiliated in any way with such activities or products. Moreover, we have a zero tolerance policy on fraudulent activities and potentially scamming practices. In a separate article, we have enumerated tips on how you can avoid investment schemes and other online scams. We urge our customers to be extra diligent with their funds and to act within our User Agreement.
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The Commission has received reports from the public regarding the investment taking activities of an entity operating under the name and style of CRYPTOPESO. Please be informed that CRYPTOPESO is not authorized to solicit investments from the public due to its lack of prior registration and/or license from the Commission as prescribed under Sections 8 and 12 of the Securities Regulation Code (SRC).
Based on information gathered by the Commission, CRYPTOPESO is publicly soliciting investments online in the guise of a mobile token wallet and payment application. CRYPTOPESO is operated by BLOCKXPERTS, INC. founded by MR. LARRIMAR ESPIRITU TIA, who is also the Chief Innovative Officer of INDIGEN, the corporation that introduces the Unilevel Marketing Program in the CRYPTOPESO application.
BLOCKXPERTS, INC. is a duly registered stock corporation under Company Registration No. CS201907584. Its Certificate of Registration was issued by the Commission on 09 May 2019. As certified to however by the CGFD, MSRD and CRMD, CRYPTOPESO and BLOCKXPERTS, INC. have not been issued a license or permit by the Commission to publicly offer or sell securities or to act as broker or dealer in securities. INDIGEN is not registered with the Commission as a corporation or partnership and thus has no license to publicly offer or sell securities or to act as broker or dealer in securities.
In 2020, the new version of the mobile application CRYPTOPESO was launched with the PHPc Staking Program. The scheme requires the investment of at least P2,000.00 from its members plus the activation fee in the amount of P500.00. In order to earn a profit, the member who invested the required amount must stake it for at least 3 months.
In one of its Facebook public posts, it entices people to invest with the following sales pitch: “Simply stake and lock in a minimum of 2,500.00 PHPc for at least 3 months, you will earn profit shares from all of our product sales and other sources of income” and “The longer you lock in your PHPc, the bigger your
shares will be”.
Once the member decides to join in the PHPc Staking Program, the amount invested will be converted into Cryptopeso (PHPc), which will be staked and locked in for 3, 6, 12, or 24 months, at the option of the investor. After staking the money, members can no longer use and convert it into Peso because if they do before the end of the locking period, they will be penalized by deducting the 7% of the total amount
they invested.
The profit shares in the said scheme will be computed based on the amount invested and its lock-in period. Every 500PHPc is equivalent to 1 share, hence, if you invested the minimum required amount of P2,500.00 or 2,500PHPc once converted into Cryptopeso, you will be entitled to 5 shares (2500PHPc ÷ 500PHPc = 5 shares). If you chose the 3 months lock-in period, your 5 shares will be multiplied by 3 in the
first month for you to get the additional 15 shares (5 shares × 3 = 15 additional shares). In the following month, your 5 shares will be multiplied by 2 which represents the remaining months of your lock-in period, therefore, in the second month, you will be able to earn an additional 10 shares (5 shares × 2 = 10 additional shares) while earning another 5 shares in your third month (5 shares × 1 = 5 additional shares). Overall, a minimum investor will be able to gain a total amount of 15000PHPc or P15,000.00 once converted into Peso after the lock-in period, which is equivalent to six times of the initial investment, without doing anything aside from investing money.
In addition, under the Unilevel Marketing Program, CYPTOPESO also offers affiliates commissions for every recruit who registers and invests using the referral link.
It is evident that the scheme offered by CRYPTOPESO is a security in the form of an investment contract. First, it involves an investment of money because the member is required to stake his money for a certain period. Second, there is an investment in a common enterprise because the party soliciting investments pays out profits from its pooled funds. Third, there is the expectation of profits because the investor is given the promise of returns in the form of cryptocurrency which can be converted into Peso after the lock-in period. Lastly, the profits are generated from the efforts of others because CRYPTOPESO and its operator undertakes to perform all the profit-generating activities like Bitcoin mining, and distributes profit shares in accordance with a scheme that they designed and fully control.
Section 8 in relation to Section 73 of the Securities Regulation Code (SRC) prohibits and penalizes with a maximum fine of five million pesos (P5,000,000.00) or a maximum penalty of twenty-one (21) years of imprisonment or both the act of offering or selling securities to the public without a registration statement filed with and approved by the Commission.
Everyone is reminded that aside from the strict penalties imposed by the Commission for violations of the Securities Regulation Code, the Revised Corporation Code, and such other rules and regulation it enforces, the Bayanihan to Heal as One Act (Republic Act No. 11469) also punishes those participating in cyber incidents that make use or take advantage of the current crisis situation to prey on the public through scams, phishing, fraudulent emails, or other similar acts.
Those who act as salesmen, brokers, dealers or agents of CRYPTOPESO/ BLOCKXPERTS, INC./INDIGEN in selling or convincing people to invest in the investment scheme being offered by these entities including solicitations and recruitment through the internet may likewise be prosecuted and held criminally liable
as held in the case of Securities and Exchange Commission vs. Oudine Santos (G.R. 195542, March 19, 2014).
Furthermore, the names of all those involved will be reported to the Bureau of Internal Revenue (BIR) so that the appropriate penalties and/or taxes may be correspondingly assessed.
In view thereof, the public is hereby advised to exercise caution in dealing with any individual or group of persons soliciting investments for and on behalf of CRYPTOPESO / BLOCKXPERTS, INC. / INDIGEN. The public is further advised NOT TO INVEST or to STOP INVESTING in any investment scheme being offered by aforesaid entities/individuals.
Should you have any information regarding any investment solicitation by any individual or group of individuals representing CRYPTOPESO / BLOCKXPERTS, INC. /INDIGEN please call the Enforcement and Investor Protection Department (EIPD) at telephone number (02) 8818-6047 or send your report to the EIPD at epd@sec.gov.ph or you may visit the EIPD office located at the Ground Floor, North Wing Hall, Secretariat Building, PICC Complex, Pasay City.
For the guidance of the public.
Pasay City, 07 April 2020.
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