It is reported that on this week, the Securities and Exchange Commission of the Philippines (SEC) has announced publicly that they are planning to enforce a guarantee regulation on cloud mining operations. This news, according to a statement from the SEC filipino regulator, the trust body believes this type of contract should be defined as securities.
Philippine Regulator More Firmly to Cloud Mining
The Philippine regulator has issued a warning for a cloud mining operation that promotes this business model without SEC permission. Cloud mining operations involve pre-purchase hashpower contracts from remote mining operations, and users must make a one-time deposit or some for a limited time.
Users of cloud mining then benefit from pool mining revenues if their operations are profitable and if mining does not break even then it suffers losses. The SEC explained that preliminary investigations have shown many local and foreign cloud mining companies are asking this contract to residents living in the Philippines.
According to Philippine regulators, this contract has promised to pay investors daily or weekly from mining and these unregistered companies also provide affiliate commissions for every user who brings others. Because of this business practice, the SEC states that Under Rule 26.3.5 par. 4 of Regulation 2015 Securities Code, this sale is defined as an investment contract. Using the Howey Test, the SEC describes the results confirming that this investment is securities.
"Since this scheme involves the sale of securities to the public, the SEC requires that the securities offered must be properly registered and that the appropriate licenses and / or permits to sell securities to the public are issued to the company and / or its agents, pursuant to Section 8 of the SEC , "The SEC statement said.
Furthermore, the warning states: "Likewise, those who act as sellers, brokers, dealers, or agents of these companies sell or convince people to invest in the investment schemes offered by these cryptocurrency mining companies, including applications and recruitment through internet without the need for license or authority of the Commission. "
Forms of infringement will be held criminally liable under Article 28 of the Securities Code Rule and punishable by a maximum of twenty-one (21) years imprisonment or both in accordance with Section 73 of the SEC.
Source : https://news.bitcoin.com/philippines-regulator-issues-warning-to-cloud-mining-participants/