SEC Flags Crypto Cloud Mining Investment Scheme BitPrime

• The Securities and Exchange Commission (SEC) has issued a warning against individuals claiming to represent “BITPRIME / BITPRIME / ARIANE ESTOLONIO – BITPRIME SOFTWARE OPC TRADING” presenting themselves as a registered DTI business offering cloud mining investment opportunities.
• The SEC noted that the entity registered as a One Person Corporation in August 2022, but had not obtained prior registration or license to solicit investments as required under the Code of Securities Regulations (SRC).
• The SEC warns the public that the investment scheme offered by BITPRIME is a Ponzi Scheme and not a registrable security.

Investment schemes that take advantage of the popularity of cryptocurrencies in the Philippines and take advantage of investors’ desire to earn money amid rising inflation and the pandemic are still increasing.

In its recent advisory, the Securities and Exchange Commission (SEC) flagged another company masquerading as a crypto mining company. Citing reports and information collected by the SEC, they are now warning the public against individuals or groups of people claiming to represent BITPRIME / BITPRIME COMPUTER SOFTWARE TRADING / ARIANE ESTOLONIO – BITPRIME SOFTWARE OPC. The regulator also specifically appointed a certain Ariane Mae Afable Estolonio for leading the entity to solicit investment from the public.

In addition, the Commission notes that the entity is presented to the public as a registered DTI under the business name BITPRIME COMPUTER SOFTWARE TRADING. The entity branded itself as a cryptocurrency service in the form of cloud mining or “a Cointrust mining company where they allegedly generate revenue through cloud mining investments.

According to the SEC, BitPrime offers five types of investments from a minimum amount of ₱500 to ₱100,000 per account with a return of 45% for 15 days. Apart from that, he also gives his Team Leader a 5% referral bonus for every successful referral. Leaders also receive a weekly allowance of ₱2,500 for at least 10 active members with a minimum group sales of ₱100,000 and a royal incentive of 3% of total weekly sales.

The SEC therefore notes that what BitPrime is trying to offer is an “investment contract,” which is a type of security and under the Code of Securities Regulations (SRC) offering it requires the entity to be duly registered with the Commission; the agent of the entity in question must also hold the appropriate registration and/or license to sell those securities to the public.

“Based on the Commission’s database, ARIANE ESTOLONIO-BITPRIME SOFTWARE OPC, was registered as a One Person Company on 04 August 2022. However, ARIANE ESTOLONIO-BITPRIME SOFTWARE OPC has not obtained a previous registration and/or license to request investment from the Commission specified under Section 8 of the Securities Regulation Code (SRC),” wrote the Commission.

In addition, the SEC also noted that the schemes used by the entity have the hallmarks of a “Ponzi Scheme” and such schemes are not registrable security.

“In this regard, the public is hereby advised to STOP INVESTING in the investment scheme offered by BITPRIME / BITPRIME COMPUTER SOFTWARE TRADING/ ARIANE ESTOLONIO-BITPRIME SOFTWARE OPC, and its representatives,” the SEC reminded the public.

Recently, the Commission issued a public warning against people pretending to work for financial companies because there has been “increasing reports of entities pretending to be legitimate and reputable financial institutions defrauding the investment public with hard-earned money. they suck.” (Read more: SEC Warns Public Against Fraudsters Posing as Registered Entities)

Just this month, the SEC also released a draft version of the implementing rules and regulations (IRR) of the Consumer Protection of Financial Products and Services Act (Republic Act 11765). Once implemented, the Commission will be able to impose stricter penalties on scammers and ponzi schemes. (Read more: STRONGER FINANCIAL REGULATIONS: SEC Issues Draft To Adopt Stricter Penalties vs Fraudsters, Ponzi Schemes)

In addition, the draft will also have “tokenized securities products” for inclusion under Section 3.1 of the Republic of Indonesia Law No. 8799, or SRC. (Read more: Does the SEC Mark Crypto as Security Under the Financial Products and Services Consumer Protection Act?)

For more SEC articles and advice, click here.

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