The Securities and Exchange Commission (SEC) has recently issued an advisory (as seen below) on CROWD1 ASIA PACIFIC INC., warning the public of the individuals and groups involved in such activities. The advisory defines the activities behind the scheme, and advises the public not to invest or stop investing in any investment scheme offered by the said company. Furthermore, SEC ordered the company and its officers or representatives to cease and desist from further engaging in activities of selling or offering sales of securities and investment contracts until the required registration is duly filled and approved by the Commission.
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.
The Commission has received information that an individual or group of persons representing an entity named CROWD1 ASIA PACIFIC INC. (CROWD1) are enticing the public to invest their money in the said entity with the promise of high monetary rewards or profits. CROWD1 claims to be engaged in a digital
gaming business that generates income from games.
Based on reports and the information gathered and verified by the Commission, CROWD1 is engaged in investment-taking activity by offering the following membership packages: 1). White Package worth PhP6,000.00; 2). Black Package worth PhP18,000.00; 3). Gold Package worth PhP48,000.00; and 4). Titanium Package worth PhP150,000.00. For a limited time, CROWD1 also offers Pro Titanium Package worth PhP240,000.00. The membership packages may also be availed in euros as shown below:
A CROWD1 member has the following ways to earn:
a) Streamline Bonus – A member is entitled to have a bonus by just joining. As the entire CROWD1 community of member grows, every member gains;
b) Binary Pairing Bonus – The company uses the binary compensation pyramiding plan structure to pay out these residual commissions;
c) Fear of LOSS Bonus – bonus commissions for sponsoring a certain amount of investing members in a 14-day time period after joining CROWD1; and
d) Matching Bonus - This is tracked and paid out using the unilevel compensation plan model. To qualify for the 10% commissions, one will need to recruit four (4) investing members.
Another type of bonus/income is the Gambling Residual Income/Residual Bonus from Games and Gambling which is the commission from the companywide gambling and gaming profit. Further, upon becoming a member, one acquires what is called as Owner Right. It is a way to participate in the company’s total revenues from affiliate income.
A scrutiny of its marketing/compensation plan shows that CROWD1’s main strategy is to earn from recruitment although, presented in the guise of digital gaming business. It must be emphasized that at present, most of the games are not yet available in the Philippines.
From the foregoing, it is apparent that the business of CROWD1, while undoubtedly a pyramiding scheme, is a securities offering through an investment contract, especially their own representation that a member is entitled to a passive income by way of an Owner Right. Furthermore, the use of the product or the online gaming is a front to entice the public to invest and to hide the recruitment aspect of the modus operandi of the company. The scheme relies heavily on inviting people for a promise of high monetary rewards that can only be achieved through recruitment of more people to participate in the scheme.
Records of the Commission show that CROWD1 ASIA PACIFIC INC. is registered with the SEC on 09 October 2019 under Company Registration No. CS201917023. However, such registration grants juridical personality to the corporation but does not authorize it to issue, sell or offer for sale securities to the public nor to undertake business activities requiring a secondary license from the Commission.
The public is hereby informed that CROWD1 ASIA PACIFIC INC. is not authorized to solicit investments from the public, not having secured prior registration and/or license to sell securities or solicit investments as prescribed under Section 8 of the Securities Regulation Code (SRC).
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 the said entity in selling or convincing people to invest in the investment scheme it is being offered including soliciting investments or recruiting investors through the internet may be held criminally liable under Section 28 of the SRC and penalized with a maximum fine of Five Million Pesos (Php5,000,000.00) or imprisonment of Twenty One (21) years or both pursuant to Section 73 of the SRC (SEC vs. Oudine Santos, G.R. No. 195542, 19 March 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 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 CROWD1 ASIA PACIFIC INC. The public is further advised NOT TO INVEST or to STOP INVESTING in the investment scheme being offered by the subject entity or its representatives.
Should you have any information regarding the operation of the subject entity, please call the Enforcement and Investor Protection Department (EIPD) at telephone number 8818-6047 or email at firstname.lastname@example.org or visit the EIPD at Ground Floor, North Wing Hall, Secretariat Building, PICC Complex, Pasay City.
For the guidance of the public.
Pasay City, 28 April 2020.