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SEC warns public against investing in Paya cryptocurrency

Agency issues cease and desist order against Payasian Pte. Ltd. Corp.

By: Irene R. Sino Cruz - CDN Digital | March 31,2020 - 11:34 AM

CEBU CITY, Philippines—The Securities and Exchange Commission (SEC) has cautioned the public against investing or promoting Paya, a cryptocurrency offered by Payasian Pte. Ltd. Corp.

In an emailed press release, SEC bared that it has issued a cease and desist order against Payasian, directing it to stop enticing the public to invest in the so-called Paya cryptocurrency because it did not have the necessary license.

The commission explained that Payasian registered as a corporation in August 2019.  However, its certificate of registration did not include an authority for the corporation to sell or offer securities to the public, an activity that requires a secondary license from the SEC.

In its order issued on March 20, 2020, the commission directed Payasian to “immediately cease and desist under pain of contempt from further engaging in, promoting and facilitating selling and/or offering for sale securities in the form of investment contracts and/or other activities/transactions.”

The commission also prohibited Payasian from using the funds in its depository banks and from transferring, disposing or conveying in any manner all related assets for the benefit of the investors.

The cease and desist order (CDO) against Payasian covers the corporation’s partners, operators, directors, officers, salesmen agents, representatives, promoters, and all persons, conduit entities and subsidiaries claiming and acting for and on its behalf.

SEC’s Markets and Securities Regulation Department (MSRD) and Corporate Governance and Finance Department (CGFD) had certified that Payasian has not registered or applied for registration as issuer of securities and for a permit to sell securities.

Even without the required license, the SEC Enforcement and Investor Protection Department found that Payasian has engaged in the sale and offering of securities in the form of investment contracts.

How it works

Under its investment scheme, Payasian enticed investors to buy Paya Coins and hold them for six months in order to receive 30 percent additional Paya Rewards. 

It also offered referral rewards. A minimum investment of P8,145 for 1,040 Paya tokens would reportedly provide the investor a daily commission of P500. One could invest as much P5,800,058 to buy 740,749 Paya tokens in order to receive a maximum commission of P10,000 a day.

Also, the corporation’s acts of publishing and making actual presentations about the investment scheme online and of inviting investors constituted a public offering, according to the Commission. 

Section 8 of Republic Act No. 8799, or the Securities Regulation Code (SRC), prohibits the sale or distribution of securities in the Philippines such as investment contracts without a registration statement duly filed and approved by the SEC. 

According to SEC, the offering of sharer packages, which are securities in the form of investment contracts, constitutes violation of Section 8 of the SRC and warrants the immediate issuance of a cease and desist order.

The commission had issued an advisory as early as November 14, 2019, urging the public to exercise caution in dealing with any individual or group soliciting investments for and on behalf of Payasian.

The public may view the full list of corporations, companies, or entities who are unauthorized to solicit investments on the SEC official website, www.sec.gov.ph, under the Advisories page. /bmjo

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