The Securities and Exchange Commission (SEC) advised the public to be careful in investing in Cryptostakers, amid the entity luring in public to invest in it with a promise of 8% daily payout or a 100% return investment for only PHP1000, discovered on social media sites.
This is after the Commission warned that Cryptostakers is operating without the required license. Meaning, it has no official authority to “solicit, accept, or take investments/placements from the public nor to issue investment contracts and other forms of securities,” as per Section 3 of the Securities Regulation Code (SRC).
SEC cautioned the public to engage Cryptostakers, as the scheme used by the entity indicates the Ponzi scheme. Ponzi scheme involves using monies from new investors to pay fake profits to prior investors, designed to favor top recruiters and prior risk-takers and is detrimental to subsequent members in case of scarcity of new investors.
Such operation or the offering and selling of securities designed after the fraudulent investment scheme is not registrable security.
For that reason, SEC is warning anyone inviting or recruiting other people to join or invest in the venture or offer investment contracts or securities to the public may be held criminally liable under Section 28 of the SRC penalized with a maximum fine of PHP5,000,000 or imprisonment of 21 years or both under Section 73 of the SRC (SEC vs. Oudine Santos, G.R. No. 195542, 19 March 2014).
Thus, the Commission discourages the public from making deals with such unregistered entities or stopping from investing in any investment scheme offered by said entities.