Philippine SEC Exposes Fraudulent ‘Abundance-Based’ Crypto Investment Scheme

The Philippines Securities and Exchange Commission (SEC) has flagged its third cryptocurrency scam this month, warning investors against a scheme dubbed “The Billion Coin” (TBC).

Marketed as a so-called “abundance-based cryptocurrency,” the SEC said in an advisory on April 14 that TBCoin’s promoters present the asset as a decentralized cryptocurrency that “aims to revolutionize the global financial system in order to eradicate world poverty.”

The concept of abundance is used to justify the asset’s autonomy from “market-driven norms” and prices by alleging that the more investors there will be, the higher the coin’s price will go. 

Unauthorized securities vendors face up to 21 years imprisonment

The SEC notes that TBC has devised “its own parameter in generating the value of its TBCoin,” based on the total number of investors. This boils down to the claim “that if TBC gathered one billion investors, each TBCoin will be worth one billion euros correspondingly.”

In addition, the scam promises alleged 100% returns every 25 days on a number of fixed investment packages. The regulator’s intervention is therefore grounded in TBC’s apparent violation of securities laws, as the scheme lures investors to invest their funds in its asset and other offerings “in lieu of passive income.” 

Moreover, the SEC notes that TBCCoin itself can be deemed as a security under the terms of its guidance on cryptocurrencies and initial coin offerings (ICOs), which determined that:

“Some virtual currencies, based on the facts and circumstances surrounding their issuance, follow the nature of a security as defined by Section 3.1 of the Securities Regulation Code.”

Lastly, the SEC points to the fact that neither TBC nor its creator are registered with the Commission, lack necessary licenses, and have not registered with the country’s central bank. TBC does not appear on CoinMarketCap’s rankings and, since the asset is not listed on known trading platforms, TBC appears to be managing its own unregistered digital currency exchange.

Investors are warned against any investment in TBC, especially during the pandemic, and notified they could face a maximum penalty of 21 years in prison for acting as “salesmen, brokers, dealers or agents of such unauthorized entities.” 

Anyone recruiting people to unlicensed securities offerings may also be criminally liable and subject to penalties or sanctions.

As reported, the Philippine central bank, Bangko Sentral ng Pilipinas requires cryptocurrency exchanges to apply for a license, while the SEC regulates certain crypto assets under national securities laws.  

Earlier this month, the regulator had warned investors against a crypto Ponzi scheme dubbed “Bitcoin Revolution.”