The Securities and Exchange Commission (SEC) has warned the public against individuals and groups engaged in unauthorized activities such as investment-taking in the guise of cryptocurrency trading and online selling.
In separate advisories issued on Tuesday, June 30, the SEC encouraged the public to exercise caution in dealing with Forsage and RCashOnline.
Forsage, which is headed by a certain Lado Okhotnikov, is not duly registered with the SEC and lacks the necessary license to solicit, accept or take investments from the public or issue investment contracts and other forms of securities, the agency said.
Forsage touts a “Crowdfunding International Platform” or a “Smart Contract Crypto Earning Program” based on the Ethereum (ETH) blockchain technology, supposedly provides long-term active and passive income to investors through a crowdfunding referral system.
As posted online, Forsage offers two commission payout systems or compensation plans called Forsage X3 and Forsage X4 for a minimum investment of 0.05 ETH, or at least P600, and a maximum of 51.2 ETH, or almost P600,000. Each program has 12 income slots that the investor may activate.
Under Forsage X3, for instance, an investor needs three referrals to complete the cycle. The first two referrals’ membership fees shall be paid to the referring member’s account while the third referral’s membership fee shall be considered as a “re-entry fee” and awarded to the referring member’s sponsor or upline.
Basically, the active income generated from the compensation plans depends on the number of referrals and/or membership fees gathered while passive income is acquired through spillovers.
Accordingly, Forsage’s so-called smart contract is synonymous to an investment contract, where there is an investment or placement of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.
The SEC said an investment contract is a security and should be duly registered with agency before it could be sold or offered for sale to the public, pursuant to the Securities Regulation Code.
Aside from lacking the necessary licenses, Forsage’s compensation plan resembles a Ponzi scheme, where investors are paid using the contribution of new investors, according to the SEC, adding that Forsage does not appear in the list of virtual currency exchanges registered with the Bangko Sentral ng Pilipinas.
RCashOnline, meanwhile, offers business packages, which include Royale products for resale, starting at P18,660 for one account and going as high as P130,620 for seven accounts with insurance worth P1 million, the SEC noted.
The scheme of RCashOnline relies heavily on recruiting members in exchange for high monetary rewards rather than on selling products. The SEC also said RCashOnline employs the same schemes and is being managed by the same persons or group operating OnlineBiz and ELITE Entrep Blue Print, which have been the subjects of previous advisories of the SEC.