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SEC Issues Cease and Desist Order Against Crypto Marketers | BitPinas

  • The SEC issued a cease and desist order against Crypto Marketers due to selling unregistered securities following numerous complaints and investigations.
  • Crypto Marketers was noted to be engaged in unauthorized sales of unregistered securities, offering subscription packages with potential returns ranging from 240% to 300%.
  • The organization, along with its owner Michael Viola and agents, were found to lack the necessary licenses to function as securities brokers or dealers.

More than two years after the public was cautioned against this entity, the Securities and Exchange Commission (SEC) has issued a cease and desist order against 50K Club/50k Clubb Online Shop/Community Help Coin (CHC) / Cryptomarketers / Cryptomarketers Worldwide, collectively known as “Crypto Marketers,” and its owner, Michael Viola. 

The order directs them to immediately stop selling or offering unregistered securities in the form of investment contracts.

Cease and Desist Order

According to the Enforcement and Investor Protection Department (EIPD), the SEC prohibits Crypto Marketers and its agents from conducting any business involving funds in their depository banks and transferring any assets, ensuring investor protection until proper registration is completed. 

The Commission indicated that it took action in response to a multitude of complaints and an investigation into purported solicitation activities and the sale of unregistered securities by Crypto Marketers.

As per the media release, since October 18, 2022, the EIPD began receiving numerous public complaints regarding purported solicitation activities by Crypto Marketers. This led to the initiation of a thorough investigation into potential breaches of securities regulations, the Revised Corporation Code of the Philippines, and other relevant laws.

Consequently, on November 10, 2022, the Commission issued an advisory cautioning the public against investing in the entity based on reported solicitations.

Further, in response to the EIPD’s request, the SEC Cagayan De Oro Extension Office (SEC CDO) initiated an inquiry and monitoring of Crypto Marketers, uncovering unauthorized sales of securities. 

How does it operate?

According to the investigation of the SEC CDO, the organization, now rebranded as “Community Helper Coin” (CHC), and led by Viola of the 50K Club Office, engaged in the unauthorized sale of unregistered securities. 

Its “community”, noted to be linked to the international crypto business “Crypto PR,” claimed a million-dollar net worth as it generates income through online advertisements, offering prospective investors subscription packages requiring a minimum investment of $100 up to $4,000 (₱6,000-₱240,000.00), with a maturity period of 60 to 100 days and a potential maximum return of 240%-300%.

Crypto Marketers also enticed its investors with offers of daily earnings of 0.6-1.2% through six ways: 

  • Get a 10% bonus for referring new members
  • Share in a 10% bonus when new members join
  • Get a cut of the 10% bonus when members withdraw funds
  • Share in a 10% “compounding” bonus
  • Get a portion of the 2% daily dividend from the Vault Balance or 58% of total packages
  • Receive a VIP/Manager award if they recruit at least ten members, with rewards of $100 and a 5% share of recruits’ subscription package.

Action Taken by the SEC

Consequently, the SEC-CDO sought a Business Certification from the Business Permits & Licensing Office of the local government unit of Cagayan de Oro (BPLO- CDO) for the 50K Club Online Shop, affirming its presence in Cagayan de Oro City. 

Concurrently, the EIPD conducted online investigations and discovered evidence indicating that Crypto Marketers promotes itself as an advertising platform for “Crypto PR” linked to overseas cryptocurrency business. The gathered evidence revealed that Crypto Marketers offer unregistered securities through subscription packages valued between $50 and $1,000, as observed in online materials and presentations. In addition, the EIPD also provided evidence supporting its claim that Crypto Marketers are selling unregistered securities. 

Certifications from the Company Registration and Monitoring Department (CRMD), the Corporate Governance and Finance Department (CGFD), and the Markets and Securities Regulation Department (MSRD) of the Commission further confirmed that neither Crypto Marketers nor Viola and its agents have been licensed to operate as brokers/dealers of securities. Additionally, they are not registered issuers of any securities, including mutual funds, exchange-traded funds, membership certificates, or time shares, as required by Sections 8 and 12 of the Securities Regulation Code (SRC).

In November 2022, the public was cautioned against engaging with Crypto Marketers as it was offering investments and enticing the public to invest their money without the necessary licenses to do so.

This article is published on BitPinas: SEC Issues Cease and Desist Order Against Crypto Marketers

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