By LITO RULONA
Northern Mindanao Security and Exchange Commission (SEC-10) would be filing appropriate charges against Freedom Traders Club’s (FTC) founder Mark Freeman, if he fails to secure franchise or permit until September, this year.
SEC-10 regional director lawyer Renato Egypto claimed that initial investigation conducted found out that FTC operates on the subject of a ‘cryptocurrency’ and trading group which violates the country’s laws on securities and investments.
“Their operations need SEC registration or permit considering that they are conducting investment operation by collecting money from the public,” said Egypto.
SEC has learned that Freedom Traders Club is conducting training and seminars in Visayas and Mindanao to promote the cryptocurrency called “Ploutos Coin”, which is marketed as an investment vehicle where token holders can profit by simply holding the coin, he added.
Egypto said before the filing of the appropriate charges in court, SEC will issue cease and desist order to stop their illegal operation and collection of money.
Earlier, SEC has noted that coins that behave like investment instruments are classified as “securities” and specifically an “investment contract”.
Ploutos Coins satisfy the following conditions to be classified as one: There is an investment of money involved; The sale of Ploutos Coins goes to a “common enterprise”; which is the “Freedom Traders Club”; Holders are led to expect profits. Profits arrive primarily from the efforts of others, not the holder.
The country requires any securities to be registered with the SEC, otherwise, the agency will find the company issuing the coins to be engaging in an illegal activity.
Egypto said anyone who acts on behalf of selling the illegal security tokens may be held criminally liable and penalized with a maximum fine of P 5 million or 21 years of imprisonment.
Information gathered by SEC reveals the following information about Freedom Traders Club and Ploutos Coin:
Freedom Traders Club is a forex trading club founded by Mark Freeman; Mark Freeman created the system to invest using Ploutos Coin; the price of Ploutos coin increases through supply and demand; it is announced that Ploutos Coin’s price will “skyrocket” after 6 months.
A Ploutos Coin Grand Launching event was held on July 8, 2018 in Cagayan De Oro, Philippines.
Egypto added that if Mark Freeman insisted that their operation is legal then they should visit the SEC regional office or even in Metro Manila and made some full disclosure of their operation including persons involved in their business transactions.
As early as of January 2018, the Securities and Exchange Commision has issued a public advisory on initial coin offerings (ICO). Tokens that can be classified as securities must be registered first with the commission. SEC has stated:
When a virtual currency is likewise analogous to any of the types of securities under Section 3.1 of the SRC, there is a strong possibility that the said virtual currency is a security under the jurisdiction of the SEC and has to be registered and necessary disclosures have to be made for the protection of the investing public.