THE Securities and Exchange Commission (SEC) flagged Xian Coin, which is an unregistered “digital currency” promising big returns with Christian Albert Gaza or Xian Gaza as the sole issuer.
Xian Coin is said to be a centralized digital currency powered by the Etherium Blockchain traded exclusively by its coin holders. A blockchain or distributed ledger is a “peer-to-peer” database across computer networks, recording transactions that may never be altered.
“Unlike other digital assets which are decentralized and use consensus [mechanisms] such as proof-of-work/proof-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,” the SEC said.
Xian Coin is not registered with the SEC as a corporation or as a partnership and it is also not authorized to solicit investments from the public.
It is also not registered as a Virtual Asset Service Provider with the Bangko Sentral ng Pilipinas, as required under Circular No. 1108, series of 2021, or the Guidelines for Virtual Asset Service Providers.
The advisory noted Xian Coin is not registered and traded with recognized cryptocurrency exchanges and has no particular use cases.
The commission also pointed to the “unsavory reputation” of Mr. Gaza to warn the public. Mr. Gaza apparently said he would be using the money generated from Xian Coins to support his “underground activities.”
Mr. Gaza has been the subject of another SEC advisory for his Cristiano Alberto Real Estate Fund.
The commission noted that Xian Coin does not have a white paper, which should detail how it will generate business, and neither does it have a working model that “[determines] how the money of the investors will make returns.”
“The scheme employed by Xian Coin 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,” the SEC said.
BusinessWorld sought comments from both Mr. Gaza and NYEAM VLOGS Facebook Page, where Xian Coin transactions are facilitated, but neither has responded as of writing.
The SEC reminded that those who are involved in the venture may be held criminally liable under the Securities Regulation Code, and may face a fine of up to P5 million, may be jailed for 21 years, or both. — Keren Concepcion G. Valmonte