Philippines issues warning against Mining City
The SEC reiterates that the company does not have the license nor authority to operate in the country
The Security and Exchange Commission of the Philippines has warned the public to avoid the Bitcoin mining company called Mining City — stating that the firm is “not unregulated”.
According to an official release by the SEC, Mining City is a Ponzi scheme that offers six mining packages to investors. The price for each package ranges from $300 to $12,600 for investors to rent the company’s mining machines, which are used to mine the “Bitcoin Vault”. Renters are then told that they can expect anywhere from $2 to $92 in payment on a daily basis, based on the plan they purchased.
The Bitcoin Vault is a BTC fork that claims to have better security than Bitcoin — a claim that authorities have disputed.
These promises have sounded the alarm bells for the SEC, which has described the operations implemented by Mining City are highly reminiscent of a Ponzi scheme.
“The scheme employed by Mining City clearly shows indication of a possible Ponzi Scheme where new investors are used in paying “fake profits” to prior investors and is designed mainly to favour its top recruiters,” the SEC explained in its announcement.
The release revealed that three individuals have been identified as the key actors in the Ponzi scheme: the CEO of Mining City, Gregory Rogowski, the team leader Anthongy Aguilar, and the administrator of the Mining City Facebook page, Jhon Rey Grey.
The SEC has advised all Filipino citizens to cease any investments they have made to Mining City, “or by entities that engage in smart contracts, cryptocurrencies, or digital asset exchanges that are not registered with the commission”.
Promoters of Ponzi schemes can be criminally prosecuted in the Philippines. They can be sentenced to imprisonment up to 21 years or given fines over $100,000.
Despite the public stance the SEC has taken against the company, Mining City appears to plan on continuing operations. A notice on its website states it will continue to operate even if the government were to shut the business down.
The notice goes as far as to say that the government cannot shut it down since it is decentralized and “free from any authority”.
Ponzi schemes in cryptocurrency and other related scams have led to over $4.3 billion in stolen funds in 2019. Malicious parties usually bank on the ambition or desperation of their victims by luring them in with the offer of easy profits.