SEC warns against new cryptocurrency
The Securities and Exchange Commission (SEC) is stepping up its campaign against crypto currency schemes after issuing an advisory on Cagayan de Oro-based Freedom Traders Club that offer Ploutos coins to the public.
The agency’s Enforcement and Investor Protection Department (EIPD) said Freedom Traders through founder Mark Freeman held an event called the Ploutos Grand Launching at the Atrium Limketkai in Cagayan de Oro City last July 8 after conducting orientation seminars throughout Visayas and Mindanao.
During the orientation seminars, Freedom Traders claimed to be a forex trading or forex auto-trading club founded by Freeman who created a new system to invest in their trades called Ploutos coins.
The coin was reportedly first sold last Jan. 1 at $1 and the value of the coin has increased to $1.75.
The company informed the participants that income is generated when the value of the coin increases and the price movement of Ploutos coins is similar to Bitcoin derived from demand and supply.
The corporate regulator said Freedom Traders is not registered as a corporation or partnership and is not authorized to solicit investments from the public.
The SEC added the company also did not secure prior registration and/or license to solicit investment from the agency as prescribed under Section 8 of Republic Act 8799 or the Securities Regulation Code.
Last January, the agency’s EIPD issued an advisory on initial coin offerings (ICOs) stating that “some of these new crypto currencies or digital coins, based on the facts and circumstances surrounding their issuance.
Given the circumstances of the issuance of Ploutos coins, the SEC said it is considered as an investment contract under Section 3.1(b) of the law.
Under the SRC’s Amended Implementing Rules and Regulations of 2015, specifically Rule 26.3.5, par. 4, an investment contract has been defined as a contract, transaction or scheme (collectively “contract”), whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others.