Philippines' SEC Delays Issuance of ICO Regulations

The Philippines’ Securities and Exchange Commission (PSEC) has recently delayed the issuance of finalized regulations for initial coin offerings (ICOs), which were expected to come by the end of last year.

According to local news outlet The Philippine Star, no new deadline has been set, but the delay came as “different shareholders” have asked the regulator for more time to study the regulations before they’re finalized.

Currently, a draft of the regulations notes that ICO projects must register with the Philippine SEC at least 45 days before it launches its token pre-sale, and submit an initial assessment request to the regulator, proposing the token sale.

This initial assessment, the news outlet notes, must include various documents, including “police and National Bureau of Investigation (NBI) records of all members of the company or start-up doing the ICO,” as well as a curriculum vitae, descriptions of the problems the project behind the ICO is set to solve, a whitepaper with offering’s risks, advantages and disadvantages, and bankruptcy records.

The draft elaborates that token issuers “may follow the nature of a security under Section .1 of the Securities Regulation Code.” It reads:

Therefore, these should be registered with the Commission and necessary disclosures need to be made for the protection of the investing public.

The news outlet reached out to PSEC to ask why the country wasn’t banning ICOs in what would be a move similar to that of China and other countries. Emil Aquílinio, the SEC’s chairperson, responded that the technology “has its benefits.”

The Philippines released a draft of their ICO regulations back in August of last year, but haven’t made any widespread actions to regulate the nascent industry so far. As CryptoGlobe covered, authorities in the country have, however, arrested suspects connected to bitcoin scams.

In July of 2018 the Philippine central bank authorized two cryptocurrency exchanges to operate in the country, allowing them to convert pesos into virtual currencies. This brought the number of approved exchanges to five at the time. Later on, the PSEC warned crypto cloud mining contracts must be registered as securities.

OneCoin Denies Being a ‘Hybrid Ponzi-Pyramid Scheme’

The controversial OneCoin organization has recently responded to the Central Bank of Samoa, claiming it isn’t a “hybrid ponzi-pyramid scheme” as it doesn’t fir the definition of these schemes, and that it is a centralized, closed cryptocurrency.

According to the Samoa Observer, the Central Bank of Samoa claimed OneCoin is a “hybrid ponzi-pyramid scheme” that “laundered money through New Zealand to Samoa.” It also claimed the organization was targeting local residents through churches.

The organization, widely believed to be running a pyramid scheme using the cryptocurrency space, sent a statement to the Observer defending itself, claiming it’s neither a pyramid nor a Ponzi scheme. It’s worth noting individuals associated with OneCoin have been arrested and charged in various countries, including China and India.

In its response, OneCoin argued that Ponzi schemes see the revenue of old investors be “generated through the investment of new investors,” and that it doesn’t require its agents, known as Independent Marketing Associates (IMAs), to recruit others in order to earn bonuses.

Its defense revolves around IMAs not being “obliged to incur any additional expenses or recruit a new IMA,” and that they are rewarded for the “value of [their] sales,” not for recruiting new agents.

The organization added pyramid scheme regulations are these for “consumer protection,” and that its IMAs aren’t consumers. This, as when they join the organization they sign a contract classifying them as “self-employed business owners.”

The users which are part of the OneLife Network are NOT consumers. They are IMAs, meaning they are self-employed business owners.

As CoinDesk notes, OneCoin argues it isn’t a pyramid scheme because its agents aren’t seen as consumers and, as such, it can’t be classified under a dictionary definition of a pyramid scheme, and doesn’t force its IMAs to recruit new agents, although they’re incentivized to do so.

OneCoin, instead, argue it is a “centralized, closed cryptocurrency” with strict anti-money laundering (AML) and know-your-customer (KYC) rules, which make it “much more compliant than decentralized [cryptocurrencies].”

As reported, OneCoin’s leaders Ruja Ignatova and Konstantin Ignatov were recently indicted by the U.S. Attorney for the Southern District of New York (SDNY) on charges of wire fraud, securities fraud, and money laundering. Konstantin was arrested in March of this year.

Moreover, earlier this month former OneCoin investor Christine Grablis filed a lawsuit against the organization’s promoters, with Grablis’ attorney claiming OneCoin’s founders created a multi-billion dollar ‘cryptocurrency’ company based completely on lies and deceit.”