The Securities and Exchange Commission–Cebu extension office on Monday warned Cebuanos against entering into digital currency schemes operated by individuals who victimize unsuspecting would-be investors.
Lawyer Giness Marie Teves, legal officer of SEC-Cebu, said digital currency Xian Coin or XNC is not licensed to offer investment schemes to the public but is very active online inviting potential investors.
“While cryptocurrency is not illegal since the Bangko Sentral ng Pilipinas (BSP) has regulated the cryptocurrency exchanges, what makes XNC dubious is that it has no SEC registration and it does not have the required license from SEC to solicit investments. Please take note that any corporation who wishes to engage in investment-taking should have a secondary license in order to operate,” Teves said in a statement.
In an advisory issued on June 7, the SEC Enforcement and Investor Protection Department (EPD) described XNC as a “Ponzi scheme.”
A Ponzi scheme, the SEC-Cebu statement said, is a fraudulent strategy where the money from new investors is used in paying “fake profits” to prior investors and is designed mainly to favor its top recruiters and prior risk-takers.
The scheme leads victims to believe that profits are coming from legitimate businesses when actually are sourced from other investors, it said.
The SEC-Cebu extension office said the EPD investigation found that Xian Coin convinces would-be prospective investors they will enjoy a high range of price stability and appreciation of value because it is taking advantage of a single and centralized supply chain.
The XNC scheme, the statement said, is independently controlled by the virtual cryptocurrency bank of Xian Gaza with a limited global supply of 75 million XNCs.
The EPD found that XNC is not a registered virtual asset service provider (VASP) with the BSP based on Circular No. 1108 issued this year, or the VASP guidelines.
The SEC in Cebu found XNC’s website https://xianco/ of Xian Coin is a centralized digital currency powered by the Ethereum Blockchain that is exclusively traded by its coin holders owned by a virtual cryptocurrency bank where one can exchange coins with other currencies.
The firm also employed online payment such as GCash and bank transfer for XNC transactions and used its official Facebook group as part of its scheme. SOVEREIGNPH