- Philippines SEC warn residents not to invest in Mining City
- Regulator states there is possible indication of Ponzi scheme
- Promoters may be charged with 21 years imprisonment or up to $100,000 fine
The Philippines Security and Exchange Commission (SEC) has issued an official warning for residents not to invest their money into Mining City. In addition to not being registered, the regulator flagged the company as a Ponzi Schema based on its system of operation. While the operators will face due penalties for violating the Securities law, the Philippines SEC also warned that the promoters could face about a 21-year jail term.
Mining City is not registered
Laut der SEC document, the Bitcoin cloud mining company, Mining City is not recognized by the commission to offer, solicit, or issue investment contracts in the country. More so, the Mining City is not registered with the country’s central bank as a digital currency-related company, which is required for all the individuals, and entities dealing with cryptocurrencies. Its operation schemes are one that points towards a Ponzi.
The regulator said:
The said scheme employed by MINING CITY clearly shows indication of a possible Ponzi Scheme where monies from new investors are used in paying “fake profits” to prior investors and is designed mainly to favor its top recruiters and prior risk takers and is detrimental to subsequent members in case of scarcity of new investors.
The cloud mining company is reportedly in partnership with the creator of the Bitcoin Vault (BTCV) scam known as MineBest. Using the BTCV token, Mining City offered about six investment plans worth from $300 to $12,600. With the supposed three-year contracts, the investors were promised up to $92 as daily returns.
SEC warns of the Ponzi scheme
In the document, the Philippines regulator warned the public to abstain from investing in any contract provided by the cloud mining company. The warning was also extended to other companies offering digital currency-related services without being registered with the commission or the central bank. Besides, people who invest in such unregulated companies stand not to gain any investor protection.
For promoters, however, the SEC mentioned that they are most likely going to face up to 21 years imprisonment or pay a fine worth more than $100,000.