SEC Facebook

The Securities and Exchange Commission (“Commission”) ha
s received information
that
CHRISTIAN ALBERT GAZA
(“Xian Gaza”)
, individuals and/or group of
persons
representing
XIAN COIN (“XNC”)
are enticing the pub
l
ic to invest in its digital currency
claiming that the holders of XNC will enjoy a high range of price stability and appreciation of
value due to the fact that it is taking advantage of a single, centralized supply chain. It further
c
laims that it is independently controlled by the virtual crypto currency bank of Xian Gaza
with a limited global supply of 75 million XNCs.
The term “digital currency”, “digital asset” or “digital token” generally refers to an
asset issued and/or trans
ferred using distributed ledger or blockchain technology, including
assets sometimes refer
red to as “cryptocurrencies”, “
virtual
currencies” and “digital coins.”
Accordingly, a blockchain
or distributed ledger is a peer
–
to
–
peer database, spre
ad
across a network of computers that records all transactions in a theoretically unchangeable,
digitally recorded data packages. Blockchains typically employ a consensus mechanism to
validate transactions, which among others aims to achieve an agreement
on data value on
the state of ledger. They are usually traded on a digital asset trading platforms in exchange
for other digital assets or fiat currency. Some digital assets are “native tokens” which means
that they are represented on their own blockchai
n, though other digital assets may also be
represented on the same blockchain.
2
Based on its website
https://xianco.in/
Xian Coin or XNC is a
centralized digital
currency
powered by the Etherium Blockchain
that is exclusively traded by its coin holders.
It is owned and issued by a virtual cryptocurrency bank where you can exchange your coins
to Xian Coin, Colombian Peso, Mexican Peso, Brazilian Real, Peruvian Sol and Philippine Peso.
It also states that t
he primary function of Xian Coin is to create a powerful, unregulated and
untraceable financial payment system that will power transactions and businesses across
geographical spheres.
To avail of XNC
Coins, the investor must do the following:
1.
Download the MEW WALLET
–
ethereum wallet app on Google Play Store and Apple
Play Store;
2.
Message your FIRST NAME and HOMETOWN to NYEAM VLOGS page
(
www.facebook.c
om/NYEAMVLOGS
);
3.
Go to XIAN GAZA Facebook group and wait for your FIRST NAME AND HOMETOWN
to be posted in the comme
nt section of XIAN COIN CHAT AU
T
H
ENTICATOR post;
3
4.
Once you have seen your FIRST NAME AND HOMETOWN in the comment section of
the XIAN CHAT AUTHE
NTICATOR post, you may now ask the page admin for the
GCASH ACCOUNT or BANK ACCOUNT DETAILS on where you will transfer your
funds, and inform the page admin how many coin you would like to buy;
5.
Once you have transferred your funds via GCASH and BANK TRANSF
ER you can take
screenshots as proof and send to the admin page;
6.
Fill out the XIAN COIN INFO SHEET to be provided by the page admin and send
together with 1 valid government issued ID;
and
7.
Go and join the official Facebook group that will be given to yo
u by the admin page.
4
Based on
the foregoing, XIAN COIN or XNC partakes of the nature of securities in the
form of investment contract
due to its centralized nature and
is therefore
subject to the
regulatory authority of this Commission.
U
nder the Howey Test
1
, an investment contract exists when there is an investment of
money in a common enterprise with a reasonable expectation of profits to be derived from
the efforts of other
s
. Hence, investment of money in XIAN COINS pooled by Xian Ga
za,
motivated by expectation of profits generated from their supposed price appreciation from
the promotional efforts of
Xian
Gaza
,
constitute an investment contract.
The US SEC in its investigative report in “The DAO” case, said that “securities law may
apply to various activities, including distributed ledger technology, depending on particular
facts and circumstances, without regard to the form of the organization o
r technology used
to effectuate a particular offer or sale.”
Thus, the of
fering and selling of Xian Coins
to the public without a permit or license
is a violation of
Section 8.1.
of the Secur
i
ties Regulation Code.
The records of the Commission show t
hat
XIAN COIN
is not registered with the
Commission neither as a corporation nor as a partnership. Further, it is
NOT AUTHORIZED
to solicit investments from the public since it has not secured prior registration and/or
license from the Commission as presc
ribed under Section 8 and 28 of the Securities
Regulation Code.
Likewise,
Xian Coin
is not a registered Virtual Asset Service Provider (VASP) with the
Bangko Sentral ng Pilipinas under Circular No. 1108, series of 2021 or the
Guidelines for
Virtual Asset
Service Providers.
In the same manner, 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
under Section 28 of the SRC penalized with a maxim
um fine of Five Million Pesos (P
5,000,000.00) or imprisonment of Twenty One (21) years or both pursuant to Section 73 of
the SRC (SEC Vs. Oudine Santos, G.R. No. 195542, 19 March 2014).
Thus, the public is hereby
WARNED
that the scheme employed by XIAN
COINS clearly
shows indication of
a
possible Ponzi Scheme
,
where monies from new investors are used in
paying “fake profits” to prior investors and is designed mainly to favor its top recruiters and
prior risk takers and is detrimental to subsequent member
in case of scarcity of new
investors.
1
Securities and Exchange Commission Vs. W. J. Howey
,
328 U.S. 293
5
Furthermore,
RED FLAGS
or warning signs abound
in connection with this virtual asset
project
as follows:

U
nsavory reputation of Christian Albert Gaza or Xian Gaza, the self
–
proclaimed
“Pambansang
Scammer,” who even boasted that the money from Xian Coins will
bankroll his underground activities. Gaza has been the subject of a previous SEC
Advisory for his Cristiano Albert
o
Real Estate Fund (CARE Fund)
.

P
romise of extravagant return
s by Xian Gaza
in his videos
where he declares
to be the
sole issuer of Xian Coin, controls the value of thereof and claims that its value will go
up.
Unlike other digital assets
which are decentralized and use consensus mechanism
such as proof
–
of
–
work/pr
oof
–
of
–
stake
or mining
and whose value is
dependent on
supply and demand
, Xian Coin is
centralized, pre
–
mined
or
generated and whose
supply and purported value
is controlled by Xian Gaza.

Xian Coin has no white paper. A white paper is an important docum
ent which details
its design and development, its evolution and how it will generate business. Thus,
having no white paper makes the project dubious and ought to be treated with
suspicion.

Xian Coin has no working model. A working model will determine
how the money of
the investors will make returns.

Xian C
oin is heavily promoted by Gaza in his Facebook page posting the alleged total
amount of investments per month from investors.

X
ian Coin is not registered and traded with recognized cryptocurren
cy exchanges and
contrary to
Gaza’s
claims, has no particular use cases.

Xian Coin
as stated
is not a registered
VASP
with the B
SP
.

Xian Coin has no permit to offer and sell securities.
Accordingly, the public is advised
NOT TO INVEST
or
STOP INVESTING
in any
scheme offered by any individuals/ent
ities operating under XIAN COIN
or such other entities
engaged in similar activities or in
i
tial coin offerings and digital asset trading which are not
compliant with the BSP and the Commission.
Sh
ould you have any information regar
ding the operation of XIAN COIN
, please send
your report to the Enforcement and Investor Protection Department at
epd@sec.gov.ph
.
For the guidance of the public.
Pasay City, 27 May
2021