SEC Facebook

This Advisory is prompted by reports received by the
Commission on the
prevalence of
unauthorized investment
–
taking activities
in the guise of purported
crypto
–
mining undertakings such as those subject of our earlier Advisories,
Mining
City
and
Hero Mining,
and in this particular instance,
CSTMINE.COM
.
The reports received by the Commission show that the scam is being
proliferated by a website called
CSTMINE.COM.
The persons
who invested their hard
–
earned money were left dry by the administrators of the website as they were not able
to withdraw their inv
estments when the website closed and became inaccessible.
Based on the information gathered from the said reports and data from open
sources,
CSTMINE.COM
engaged in investment
–
taking activities by introducing a
platform that makes it appear that the inves
tors will earn through leasing or owning a
supposed ‘crypto mining’ machine. To wit:
Put simply, ‘Crypto Mining’ or crypto currency mining is the process of creating
new digital ‘coins.’ A more technical explanation of crypto mining can be explained
th
rough the e
xample of Bitcoin mining where
the said crypto mining originated. Bitcoin
mining involves powerful computers that ensure that transactions are valid and
correctly added to the Bitcoin blockchain, this process is also the means whereby
Bitcoin is
created. Bitcoin mining requires powerful computing power and sophisticated
equipment. The miners of Bitcoin are also rewarded with Bitcoin upon every successful
transaction solved by their computers, hence the term bitcoin mining.
Apparently, t
his is th
e concept that the new scammers are
leveraging on
to
entice their prospective victims on investing hard
–
earned money on their illegal
investment
–
taking schemes like the subject entity at hand,
CSTMINE.
COM
.
Specifically,
CSTMINE.
COM
offers their
prospective investors a guaranteed
profit through the machine they lease or own. In order to lease a computing machine
or “mining rig,”
the investors are to invest
an initial capital
of at least 3,500.00 Nigerian
Naira up to 65,000.00 Nigerian Nai
ra
that is to be deposited in their bank accounts
and will earn through the mining process of the computer being leased. The potential
profit through this option depends on the time the amount of initial capital is deposited
and the investor is promised to ea
rn daily income through ‘mining’ wherein the said
daily income depends on the initial profit. The bigger the initial capital, the bigger the
projected profit. It is also worth noting that there is a period of
25 to 150 days to totally
earn the projected pr
ofit which is around twice the initial capital
.
On the other hand,
in order to ‘own’ a computing machine, the investor needs
to shell out a considerably higher amount of initial capital
. The investors are further
promised profit each time they succe
ssfully recruit an individual to invest in their
scheme.
To wit:
Further,
CSTMINE.
COM
also offers incentives or bonuses from logging in to
their website. Every time a user checks in to their website or mobile application, the
users are rewarded. The re
wards increase depending on how many consecutive days
they check in to the website or mobile application. This incentive or bonus is only an
option but the investor will still earn through the commissions from their investment.
In this regard, the public is made aware that
an “
investment contract”
which is
a kind of security,
exists when there is an investment or placement of money in a
common enterprise with a reasonable expectation of profits to be derived from the
efforts of o
thers which is prominent in the scheme of
CSTMINE.COM.
As such, the Securities Regulation Code (SRC) requires that said offer and sale
of securities must be duly registered with the Commission and that the concerned
entity and/or its agents should have the appropriate registration and/or license to sell
such s
ecurities to the public.
Based on the records of the Commission,
CSTMINE.COM
is
NOT
REGISTERED
with the Commission
AND
OPERATES
WITHOUT THE NECESSARY
LICENSE AND/OR AUTHORITY
to solicit, accept or take investments/placements
from the public nor to issu
e investment contracts and other forms of securities defined
under Section 3 of the Securities Regulation Code (SRC)
.
“Crypto
–
mining” scams like the one pr
o
pagated
by
CSTMINE.COM
are
NOT
UNCOMMON
. Illegal investment
–
taking schemes which often victimize
the investing
public takes many forms. To wit:
Some entities ev
en depict themselves as saviors
to those who have been
already victimized by other entities.
Further, the scheme employed by
CSTMINE.COM
,
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 members in case of scarcity of new investors.
The offering and selling of securities in the form of investment contracts using
the
“Ponzi Scheme”
which is fraudulent and unsustainable, is
NOT
a registrable
security. The Commission will not issue a License to Sell Securities to the Public to
persons or
entities that are engaged in this business or scheme.
In view thereof, the public is hereby advised
NOT TO INVEST
or
to
STOP
INVESTING
in the investment scheme being offered by
CSTMINE.COM
,
and its
representatives
.
Accordingly, the Commission warns all unscrupulous individuals and/or entities
that
strict penalties are imposed for violations of the Securities Regulation Code,
the Revised Corporation Code, and such other rules and regulations enforced
by the Commission
.
Those who act as salesmen, brokers, dealers or agents
,
representatives,
promoters, recruiters, uplines, influencers, endorsers, abetters and enablers
of
such
unauthorized entities like the operators of the
CSTMINE.COM
in selling or convincing
people to
invest in their investment scheme offered including solicitations and
recruitment through the internet may likewise be criminally prosecuted and penalized
with a maximum fine of
Five Million pesos (P5,000,000.00) or a penalty of Twenty
–
one (21) years of im
prisonment or both pursuant to Sections 28 and 73 of the
SRC
.