Philippines SEC Publicly Warns Cryptogix and Cryptocurrency Marketers for Violating Capital Market Legislation

The Securities and Exchange Commission (SEC) of the Philippines has issued a public advisory cautioning people not to invest in businesses that market illegal investment products.

The Warning against Sophia Francisco Holding OPC, Financial Consultancy Services Sophia-Francisco Trading, and Sophia Francisco Trading, all of which operate under the name Cryptogix, was issued by the Enforcement and Investor Protection Department.

The SEC reported that Cryptogix advertised investments on social media under the pretense of offering 100% returns in as little as 90 days. A referral payment of 5% will be provided to individuals who “encourage” new investors to invest money in the plan.

According to the SEC, Cryptogix’s product qualifies as an investment product and needs to be registered with the commission. It continued by pleading with the public not to invest in Cryptogix’s offering because it is illegal under the country’s current securities rules.

“According to the Commission’s data, neither CRYPTOGIX as a company nor as a partnership is registered. Additionally, CRYPTOGIX is NOT PERMITTED to seek for investments from the general public as it has not obtained prior registration and/or license from the Commission as required by Sections 8 and 28 of the SRC, according to the warning.

A similar caution was also given in regards to Crypto Marketers/Crypto Marketers Worldwide, organizations actively involved in enticing members of the public to invest in a scheme that promised returns of 2% per day. Although the SEC claims that the firm is operating unlawfully, investors in the scheme are expected to deposit USDT to a wallet.

The SEC continues by stating that anyone “selling and convincing consumers to engage in the investment scheme” while posing as a salesperson for the company may be held criminally liable and subject to up to 21 years in federal prison.

As stated by the Supreme Court in the case of Securities and Exchange v. Oudine Santos, “as well as those who invite or recruit others to join in such a venture, or offer investment contracts or securities to the public, may incur criminal liability, or otherwise be sanctioned or penalized accordingly.”

The pace at which global financial market regulators are keeping an eye on the digital assets agency is picking up. The status of digital currencies is a topic of intense discussion in the ecosystem since, if the traditional definition of securities is used, their issuance might give them that status.

The U.S. SEC’s lawsuits against Ripple Labs over XRP tokens since 2020 are based on this argument. The case has taken many turns, but as it nears its conclusion, supporters wait impatiently for the courts to make a ruling.

According to Stephanie Avakian, director of the SEC’s Enforcement Division, “We allege that Ripple, Larsen, and Garlinhouse failed to register their ongoing offer and sale of billions of XRP to retail investors, depriving buyers of adequate disclosures about XRP and Ripple’s business as well as other significant long-standing protections that are fundamental to our robust public market system.”