People are discussing a mining contract plan and conducting a round called “Mining City” or “Bitcoin Vault” online. The Philippine Securities and Exchange Commission (SEC) recently issued a warning against the action and the alleged project planner.
To be sure, there have been many encrypted Ponzi schemes over the years, and they usually attract many users before they collapse. However, as the story of the collapse of the project occurs in any pyramid scheme, only the top leaders can take all the money.
A special pyramid scheme called “Mining City” is a cloud mining operation that uses tokens called Bitcoin Vault or BTCV to pay users. The mining city claims to have an off-site data center full of mining equipment, and the project sells cloud mining contracts to investors.
Mining City sells cloud mining contracts in the form of multi-year packages. Depending on the hash rate package purchased, the price of each contract may exceed $12,000. Those who defrauded the project on cryptocurrency forums and social media platforms promised investors that the daily return paid in BTCV was $100.
Allegedly, the mining city and BTCV plan were cited by the project’s chief executive Gregory Rogowski, Philippine group leaders Anthony Aguilar and Jhon Rey Grey. The value of BTCV is listed on the coin market value aggregator Coingecko, which set a record high of $489 on August 1, 2020. Since then, Mining City’s tokens have fallen by -85.27% and are now trading at $72 per BTCV.
There are many reports and studies that show that the mining city project is a pyramid plan, and the research results show numerous red flags. On September 10, 2020, the Philippine Securities and Exchange Commission (SEC) issued a warning regarding the operation of the mining city.
The Philippine Securities and Exchange Commission called the mining city a blatant Ponzi scheme, and stated that “the so-called smart contract or mining city contract is in the form of an investment contract under the supervision of the committee and has the nature of a security.
The Philippine Securities and Exchange Commission added:
The above scheme used by the Mining City clearly shows a possible Ponzi scheme in which new investor funds are used to pay “false profits” to those who invest first.
The regulator also emphasized that investors “should not invest in the mining city” or “stop investing in projects”. The SEC reminded investors that when the Ponzi scheme collapses, it will not be able to protect them because it “is not subject to prudence and market behavior requirements.”
Despite being condemned by the Philippine Securities and Exchange Commission, “Bitcoin Vault” or “Bitcoin Vault Price” is a breakthrough search in Google Trends. In addition, tech giants such as Twitter, Facebook, and Youtube allow Mining City Ponzi to flourish because thousands of posts and videos can be found on these platforms.
According to representatives of the mining city, the project completely refutes the requirements of financial regulators. In a special article, the leader of the mining city stated “[Philippines SEC] The appearance of the list seems to be due to misinformation posted by Filipino individuals. “
However, the Philippine Securities and Exchange Commission (SEC) warned that regulators may also hold the YouTube channel “crypto knight miner” criminally responsible. In addition, if charged, the operators of the mining city will face fines of up to 5 million pesos (more than $100,000) and 21 years in prison.
What do you think of the recent warning from the Philippine Securities Regulatory Commission to the mining city? Tell us what you think in the comments section below.
Picture Credits: Shutterstock, Pixabay, Wiki Commons, Philippines SEC,
Disclaimer: This article is for reference only. It is not a direct offer or solicitation of an offer, nor is it a recommendation or endorsement of any product, service or company. Bitcoin.com does not provide investment, tax, legal or accounting advice. The company or the author shall not bear any direct or indirect responsibility for the use or reliance on any content, goods or services mentioned in this article or any loss or loss related to it.