SEC issues warning against bitcon investment scheme

The country’s corporate regulator has issued an advisory against investment scams, this time involving Pluggle Inc., a bitcoin-based investing scheme.

“The public is hereby informed that Pluggle, Inc., despite having been registered with the Commission as a corporation, is not authorized to solicit investments from the public as it has not secured the necessary license or permit from the Commission,” the Securities and Exchange Commission (SEC) said in an advisory.

SEC said that under its investment practice, Pluggle, which claims that it has an “advertising website,” requires its members to sign up to its website through a sponsored link and purchase an activation code worth P1,000 through their accounts “using bitcoin or through other legitimate members or leaders.”

“In its Facebook account, Pluggle promises a return of 30 percent to 100 percent in 12 days with the above-mentioned system,” the SEC advisory reads.

Pluggle claims that its members could earn through sign up bonuses of P100 upon registration, personal login bonus of another P100 every time one logs in his or her account, group login bonus worth P60 per login of the member’s first level downlines and another P40 per login for the second downline. There is also a follow bonus where a member is promised to earn P100 for every person he or she sponsors into the system.

In addition, a leveling bonus of P400 is given to a member “for one pair in each level down to the 10th level of the binary structure.” Lastly, a pairing bonus of P100 for every pair in the binary structure. Based on the information gathered by SEC, there are no limitations as to the number pairs.

“The public is hereby advised to exercise caution before investing in these kinds of activities and to take the necessary precaution in dealing with Pluggle Inc. or its representatives,” said SEC.

Pluggle sales personnel, brokers, or agents are also at risk of prosecution and can be held criminally liable under Section 28 of the Securities Regulation Code and penalized with a maximum fine of P5 million or penalty of 21 years imprisonment or both.

In a related development, SEC reiterated a circular of the Bangko Sentral ng Pilipinas (BSP) that it does not endorse virtual currency like bitcoins.

Based on the central bank’s Memorandum Circular No. 944, BSP does not intend to endorse virtual currency such as bitcoin, “since it is neither issued or guaranteed by a central bank nor backed by any commodity.”

The public is hereby advised to exercise caution before investing in these kinds of activities. SECURITIES AND EXCHANGE COMMISSION