SEC warns vs 5 crypto scams | Inquirer Business

SEC warns vs 5 crypto scams

/ 05:02 AM August 04, 2018

The Securities and Exchange Commission has warned the investing public against five companies that mostly ride on the cryptocurrency and online investing hype to promote anomalous investment schemes.

The SEC issued separate warnings against these five entities: Cypto Expert Inc., Paysbook E-Commerce System Co. Ltd., Freedom Traders Club, Purewealth EBC Corp. and Yeheey iTraffic System Inc.


These entities operate varying schemes, mostly using the internet, but none of them is authorized by the SEC to solicit investments.

In the case of Crypto Expert, the SEC received information that certain individuals or group of persons were offering online investments to the public falsely claiming that the company they represent was registered with the SEC.


It entices the public to invest by promising unreasonably high returns of 25 percent guaranteed every week. The agents claim that the money solicited from investors were used to fund the trading activities of the corporation.

“After profits are earned, payouts are then distributed to all the investors on a weekly basis. To further entice people to invest, non-monetary rewards such as cellphones, laptops and appliances are given as incentives to investors,” the SEC said.

In the case of Paysbook, the SEC said that individuals or group of persons representing this entity through its founder Arjay Gallenero were offering online investments as well as its own cryptocurrency called “Indigen coins” to the public.

The SEC pointed out there was no such entity called Paysbook in its database.

Based on information gathered by the SEC, Paysbook entices the public to invest by selling online account activation codes for participation in its platform to allegedly earn by simply logging in and out of the website and recruiting other individuals to join the investment scheme.

By simply accomplishing the registration process, an investor is promised to earn P300. More profits are promised if a participant purchases an activation code from an upline recruiter by paying a one-time fee of P1,000. Indigen coins are earned for every post, comment, share or like to the investor’s Paysbook social media account.

The SEC also exposed Freedom Traders Club, founded by one Mark Freeman, as an entity that is not registered as a corporation or partnership.


This entity has been conducting orientation seminars throughout Visayas and Mindanao to promote the grand launching of “ploutos” coin, pitched as an investment vehicle where coin holders can earn a profit by merely holding these coins. It has been publicly announced that the price of ploutos coins will “skyrocket” after six months.

Another entity exposed by the SEC was Purewealth EBC, which was offering a cryptocurrency called “purepound.”

Based on SEC’s records, Purewealth is registered as a corporation with the primary purpose of engaging in other wholesale activities but the same entity was not authorized to solicit investments from the public.

This entity and its other promoters, brokers and agents have been conducting various events around the country and online promotions to offer and sell purepound, which can be acquired by purchasing a cryptocard from Purewealth’s website for P3,999, the SEC said.

Finally, the SEC warned that certain individuals or group of persons representing Yeheey iTraffic were enticing the public to invest through the internet. A person enticed to be a member is asked to pay P1,000 in exchange for promises of bonus points.

Yeheey is not registered with the SEC and not authorized to solicit investments.

The SEC said that investment scams would have the following features:

  1. Unrealistic high returns on investment;
  1. Underlying activity is not explained well or is too complicated to understand, and
  1. Promoters discourage investors from cashing out their investment and encourage the rolling over of the investment or infusing more money.

The SEC said those who act as salesmen, brokers, dealers or agents of a company in selling or convincing people to invest in the investment scheme described as a potential investment scam may be prosecuted and held criminally liable. They face a maximum fine of P5 million or 21 years imprisonment or both.

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TAGS: cryptocurrency, Securities and Exchange Commission
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