THE Cagayan Economic Zone Authority (CEZA) said on Tuesday it would subject the 25 cryptocurrency exchanges it planned to issue licenses to operate in the ecozone to a strict probity and integrity check.
In a statement, CEZA Administrator and CEO Raul Lambino said if these exchanges would hold their initial coin offerings (ICOs), his agency would have to see if these were asset-backed.
“If they offer in the market their initial (digital) coin, they may be able to convince 50 unsuspecting investors and promise them the sun and the moon. This is a Ponzi scheme. We are not going to allow it,” he added.
The Investopedia website defines this scheme as a “fradulent investing scam promising high rates of return with little risk to investors” and “generates returns for older investors by acquiring new investors.”
Each crypto exchange was required to invest $1 million (P53.47 million) within two years of operations—a move, Lambino said, aimed to prevent the country from becoming a scam haven.
“There are many operating scammers who put [up]an exchange with very little capital and they are victimizing investors. We do not want the Philippines to be a haven (for scammers), even if these scams are happening abroad,” Lambino said.
“[T]hrough our probity and integrity check, we can determine if their transactions are just designed to entice unsuspecting people to invest in Bitcoin or whatever” fradulent cryptocoin, he added.