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PUREPOUNDThe Securities and Exchange Commissionhas received information that PUREWEALTH EBC CORPORATION(Hereafter “PUREWEALTH”)isoffering a cryptocurrency called PUREPOUND to the public.Per records of the Securities and Exchange Commission (“Commission”), PUREWEALTHis registered with the Commission as a corporation with the primary purpose of engaging in other wholesale activities. However, the said corporation isnot authorized to solicit investments from the public as the above-mentioned entity did not secure prior registration and/or license to solicit investmentsfrom the Commission as prescribed under Section 8 of the Securities Regulation Code.Based on information gathered by the Commission, PUREWEALTH, together with other promoters, brokers and agents,has been conductingvarious events around the country and online promotions tooffer andsellPUREPOUND.PUREPOUNDwas advertised and promoted asan investment vehicle where coin holders can earn a profit by merely holding the said coins. Likewise, the following informationweregathered:1.PUREPOUNDcanbe bought and sold atPUREWEALTH’scryptocurrency exchange athttp://cryptrade-asia.com/;2.PUREPOUNDcan alsobe acquired by purchasing a Cryptocard from PUREWEALTH’s website for PhP3,999.00. It includes PhP4,500 worth of PUREPOUND. PUREWEALTH’s Cryptocard also allows its holder to engage in “Passive Mining” by uploading official receipts;3.There arethree ways of earning profit through PUREPOUND, to wit:a.HOLDING –When holding, you buy cheap, hold and sell high;b.TRADING –When trading, you catch highs and lows of price on crypto-exchange and make fast profits; andc.INVESTING –When investing, you buya coin during the initial coin sale stage and wait for the proposal to be realized.Manila
4.As of29 April 2018, PUREPOUNDis allegedly the second largest currency in terms on global capitalization behind Bitcoin and above Ethereum;5.On 5 May 2018, PUREPOUNDwasinitially launched by PUREWEALTHChairman PHILIP WEN BOMBITAat the SMX Convention Center in Bacolod City, Negros Occidental;6.On July 2018, the PUREPOUNDteam claimed that it submitted its whitepaper and registration application with the Commission;7.Last 6 July 2018, PUREPOUND, advertised as the 1stFilipino Cryptocurrency,held a Soft Launching and Presentationwiththe theme “Purepound presents Many Ways to Earn: The Next Big Thing of Cryptocurrency” in Kalibo, Aklan;8.PUREWEALTHis scheduledto host promotional events on the following dates and areas:a.July 19 in Dumaguete;b.July 24 in Romblon;c.July 31 in Baguio City;d.August 4 in Zamboanga City;e.August 11 in Cotabato City;f.August 18 in General Santos City;g.August 25 in Butuan City;h.September 1 in Cagayan de Oro City;i.September 8 in Surigao City;j.September 15 in Davao City;k.September 22 is Leyte ICO;l.September 29 is Cebu ICO;m.October 20 is Iloilo ICO;n.October 27 is Capiz ICO;o.November 3 is Aklan ICO; andp.November 24 is National ICO at the Manila Hotel.9.On 22 September 2018, an event called the “Purepound Initial Coin Offering” will be held at the Oriental, Palo, Leyte to allegedly publicly launch the “initial coin offering” of PUREPOUND.Contrary to the above-mentioned schedules, as early as April 2018, PUREPOUNDis already beingsoldin their cryptocurrency exchangeand is claimed to have the following values during the corresponding dates:a.PHP179.74 on 5 April 2018;b.PHP183.13 on 6 April 2018;c.PHP13,515.42 on 26 April 2018;
d.PHP13,516.00 on 28 April 2018;e.PHP28,760.39 on 4 May 2018;f.PHP30,636.76 on 30 May 2018;g.PHP32,850.99 on 2 June 2018;h.PHP33,152.63 on 4 June 2018;i.PHP33,582.31 on 6 June2018;j.PHP33,712.98 on 7 June 2018;k.PHP35,200.05 on 13 July 2018As of 23 July 2018, one PUREPOUNDis sold at PHP35,216.89.Contrary to the representations of the PUREPOUNDteamin their individual Facebook pages, per SEC records, PUREWEALTHhas not submitted any formal application for the registration of PUREPOUND with the Commission nor have they applied for a secondary license for the offer, promotion, sale or solicitation of PUREPOUND.It should be noted that, the Commission, thru the EIPD, issued the8 January 2018 ADVISORY ON INITIAL COIN OFFERINGSstating that “some of these new cryptocurrencies or digital coins, based on the facts and circumstances surrounding their issuance, follow the nature of a security as defined by Section 3.1 of the Securities Regulation Code.”Given the circumstances of the promotion, offer and saleof PUREPOUND,it isconsidered as an investment contractunder Section 3.1(b)of the RA 8799, otherwise known as the Securities Regulation Code. Under Rule 26.3.5, par. 4of the SRC’s Amended Implementing Rules and Regulations of 2015, an investment contracthas been defined as a contract, transaction or scheme (collectively “contract”), whereby a person invests his money in a common enterprise and is led to expect profits primarily from the efforts of others.Applying the Howey Test,as discussed by the Honorable Supreme Court in Power Homes Unlimited vs. SEC (G.R. No. 164182, February 26, 2008), PUREPOUNDis aninvestment contractbecause the following requisites concur:1.Investment of moneyThere is investment of money because PUREPOUNDcan only be acquired in exchange for Philippine Pesosin PUREWEALTH’s Cryptocurrency Exchange (http://cryptrade-asia.com/)or by purchasing a PUREWEALTH’s Cryptocard which contains Php4,500.00 worth of PUREPOUND. As posted above, one PUREPOUNDmay be bought for PhP179.74 as early as April 2018 fromthe said exchange.Likewise, it was publicly announced that the price of PUREPOUNDcontinues to go higher.2.In a Common Enterprise
The proceeds of the sale of PUREPOUNDgo directly to the PUREPOUND teamandPUREWEALTH,its issuer, who shall use such funds to create the mobile platform for the use of the cryptocurrency.3.With the expectation of profitsThe primary consideration for the purchase of PUREPOUNDis the potential to earn profits as a result of the coin’sprojected growth in market value. This marketingpitch led the public to purchase the said coin with the expectation that they will earn profits from the price appreciation.4.Primarily from the efforts of othersThe PUREPOUNDinvestor does not need to exert any effort to earn profits. As shown above, acoin holder only needs to retain ownership of the said coin and eventually sell it once its price appreciates.Undoubtedly, the PUREPOUND is a SECURITY TOKENand its sale and offerconstitutesa saleoroffer of an investment contract within the purviewof the term “securities” as defined by law.Since this scheme involves the sale of securities to the public, the SRC requires that the said securities offered are duly registered and that the appropriate license and/or permit to sell securities to the public are issued to the corporation and/or its agents, pursuant to the provisions of Section 8 of the SRC.Likewise, those who act as salesmen, brokers, dealers or agents of these companies in selling or convincing people to invest in the investment schemebeing offered by these cryptocurrency mining companies including solicitations and recruitment through the internet may likewise be prosecuted and held criminally liable under Section 28 of the Securities Regulation Code and penalized with a maximum fine of Five Million pesos (P5,000,000.00) or penalty of twenty-one (21) years of imprisonment or both pursuant to Section 73 of the SRC.Accordingly, those who invite or recruit other people to join or invest in this venture or offer investment contracts or securities to the public may be held criminally liable or accordingly sanctioned or penalized in accordance with the Supreme Court decision in the case of SEC vs. Oudine Santos(G.R. No. 195542, March 19, 2014).Furthermore, the names of all those involvedwill be reported to the Bureau of Internal Revenue (BIR) so that the appropriate penalties and/or taxes be correspondingly assessed.In view thereof, the public is hereby advised to exercise caution before investing in these kinds of activities and to take the necessary precaution in dealing with PUREWEALTH EBC CORPORATIONor its representatives.
Informationand inquiries as to whethersecurities are registered or not may be sought from the SEC’s Corporate Governance and Finance Department, or Market andSecurities Regulation Department through telephone numbers 818-6103 and 818-5703 respectively.The Commission urges anyone who has knowledge or information about any business transaction involving these securities or investment opportunities to report such activity so that appropriate actions could be taken through the Enforcement and Investor Protection Department at (02)818-6337 or (02)818-6047 or email us at epd@sec.gov.ph.For the guidance of the public.24July2018.