Crypto Hub Finance Faces PH SEC Accusations of Operating an Illegal Ponzi Scheme

The Securities and Exchange Commission (SEC) has issued an emergency public alert, warning that CRYPTO HUB FINANCE, a group known for soliciting investments via social media, is operating without the legal authorizations required for such activities.

Unauthorized and Unregistered: SEC's Stand on Crypto Hub Finance

Investigative reports sourced by the Commission revealed that the aforementioned entity has been actively encouraging the public to participate in its investment schemes through its website and associated Facebook group.

Crypto Hub Finances operational model appears to be akin to an “investment contract”, a kind of security where money is invested in anticipation of returns that are generated by the efforts of others. As outlined by the regulatory authority, securities of this nature are required to be properly registered with the Commission under the Securities Regulation Code (SRC). Moreover, relevant entities are mandated to possess the correct license and registration to offer such securities to the public.

Nevertheless, SEC found that CRYPTO HUB FINANCE operates without being officially registered as a corporation or partnership and without holding the necessary licensure and authority. This absence of required registration and authorization deems their solicitation, acceptance, or receipt of investments from the public and issuance of investment contracts as illicit under Section 3 of the SRC.

The Investment Scheme of Crypto Hub Finance

Crypto Hub Finance, through its website, purports to be a junction where cryptocurrency acumen meets financial liberation. In its statement, the platform emphasizes the importance of transparency and sustainability, asserting that its $HUB token is the solution to establishing these principles.

The entity proposes investment plans that start from a minimum of 50 BUSD (roughly ₱2,786.38), assuring up to 2% daily returns for 75 days. Additional benefits like a 5% affiliate bonus and a 5% cashback are also promised.

SEC Identifies Ponzi Scheme Traits in Crypto Hub Finance

Furthermore, the Commission has detected traits consistent with a Ponzi Scheme in the workings of CRYPTO HUB FINANCE. Such schemes rely on the funds procured from new investors to deliver “artificial profits” to those who invested earlier. This mechanism predominantly favors the initial risk-takers and the top recruiters, potentially leaving the later joiners at a loss if the inflow of new investors dwindles.

SEC Cautions Public Against Interactions with Crypto Hub Finance

The SEC emphasizes that investment contracts operating via Ponzi Schemes are not securities that can be registered, and it will not grant licenses to entities that engage in such deceitful and unsustainable business models or schemes.

As a consequence, the SEC has cautioned the public against investing or continuing to invest in schemes put forward by CRYPTO HUB FINANCE and similar entities. The public is also urged to be vigilant when interacting with individuals or groups that solicit investments or recruit investors on behalf of CRYPTO HUB FINANCE.

Salesmen, brokers, dealers, or agents found guilty of working for CRYPTO HUB FINANCE may be subjected to a penalty of up to Five Million Pesos (₱5,000,000.00) or a maximum imprisonment term of Twenty-One (21) years, or both, in accordance with Section 28 of the SRC. Additionally, their details will be forwarded to the Bureau of Internal Revenue (BIR) for evaluation and imposition of corresponding penalties and taxes.

The Commission is encouraging the public to report any instances of investment solicitations from individuals or groups purporting to represent CRYPTO HUB FINANCE. Such reports can be emailed to epd@sec.gov.ph.

To keep abreast of the latest developments, you can download and install the WikiFX App on your smartphone. To download the app, follow this link: https://social1.onelink.me/QgET/px2b7i8n.

Be Alert, Be Safe

In the wake of this recent disclosure, it becomes even more crucial for potential investors to remain vigilant and cautious while dealing with investment solicitations from any source, especially from groups like Crypto Hub Finance, which the SEC has explicitly warned against. The potential risks and pitfalls are high, and it is essential to ensure the legality and legitimacy of investment platforms before committing any resources.

The SEC, as part of its mandate, continues to protect the public from fraudulent schemes and unregistered entities. The Commission urges everyone to report any information they may have about investment solicitations by individuals or groups associated with Crypto Hub Finance. Together, we can work towards a more transparent and secure investment environment.