The Securities and Exchange Commission (SEC) has issued a stark warning to the public about Skyline Crypto and Dry Goods Trading, revealing that the company is operating without proper authorization and engaging in activities resembling a Ponzi scheme.
The SEC’s advisory followed reports that representatives of Skyline Crypto were promising astonishingly high returns on investments via online platforms, particularly Facebook Messenger group chats. Investors were allegedly lured with promises of a 35 percent return on investments ranging from PHP 1,000 to PHP 1 million, all within a brief period of just 15 days. Additionally, the entity has been enticing potential investors with lock-in programs that offer smartphones and various motor vehicles as rewards.
Under the Securities Regulation Code (SRC), any investment contract involving money in a common enterprise with profits expected primarily from the efforts of others must be registered with the SEC. Furthermore, entities and their agents offering such investment contracts or securities need to possess the necessary registrations and licenses to legally solicit investments from the public.
According to the SEC’s database, Skyline Crypto and Dry Goods Trading is not registered as a corporation or partnership, nor does it have the requisite licenses to engage in investment solicitation. The regulatory body highlighted that the scheme employed by Skyline Crypto closely mirrors a Ponzi scheme, where returns to early investors are paid from the contributions of new investors, rather than from legitimate business activities.
“The offering and selling of securities in the form of investment contracts using the ‘Ponzi scheme,’ which is fraudulent, is not a registrable security,” the SEC emphasized in its statement. The regulator further pointed out that the Financial Products and Services Consumer Protection Act (FCPA) explicitly prohibits such fraudulent investment schemes, including Ponzi schemes, which involve deceptive solicitation of investments from the public.
Engaging in these illicit activities without an SEC license is classified as investment fraud under the FCPA. Consequently, the SEC has advised the public to avoid investing in Skyline Crypto and Dry Goods Trading or any other similar entities.
Individuals involved in promoting and soliciting investments for Skyline Crypto—whether as salesmen, brokers, dealers, or agents—face severe legal repercussions. Under the FCPA and the SRC, they could be subject to penalties of up to PHP 5 million, imprisonment of up to 21 years, or both.
The SEC’s stern warning is a reminder for the public to exercise caution and due diligence when approached with investment opportunities, especially those promising unusually high returns in a short period. The commission encourages investors to verify the legitimacy of investment offers and the registration status of companies through the SEC’s official channels to protect themselves from potential fraud.
