SEC Shuts Down Riscoin, BG Wealth Over 1.3% Daily Return Promises
Philippine regulators halted operations at Riscoin and BG Wealth Sharing Ltd. after discovering they were soliciting investments through unregistered crypto schemes. The enforcement action followed months of warnings that both firms ignored.
Key Takeaway
Promised daily returns of 1.3% triggered SEC enforcement against two unregistered crypto schemes targeting Filipino investors.
The Philippine SEC issued cease-and-desist orders against BG Wealth on May 20 and Riscoin on May 14, halting both operations for selling unregistered securities. BG Wealth founder Stephen Beard required a ₱30,907 ($500) minimum investment and promoted the scheme through DSJ Exchange trading platform, particularly targeting overseas Filipino workers with promises of 1.3% daily returns. Riscoin operated through multiple related entities including Riscoin Exchange, Riscoin Trading, League of Seagull Ltd., and Seagull Alliance.
The SEC said in its May 14 order that Riscoin's act of selling unregistered securities "operates as a fraud to the public which, if unrestrained, will likely cause grave injury or prejudice to the investing public." The regulator found that Riscoin required investors to place funds on its websites and follow trading signals from crypto managers who supposedly generated unusually high and guaranteed daily returns from cryptocurrency trading.
Both schemes had been flagged months before enforcement action. The SEC issued advisories warning about Riscoin in February and BG Wealth in January, yet both continued soliciting investments afterward. The regulator cited violations of the Securities Regulation Code and Financial Products and Services Consumer Protection Act, invoking the Howey Test doctrine that classifies these arrangements as investment contracts requiring registration.
The SEC ordered asset freezes on both firms to preserve investor funds, covering bank accounts and assets accessible through Philippine financial infrastructure. BG Wealth had previously been warned by regulators in Canada, New Zealand, Tonga, Samoa, the UK, Utah, and Washington before reaching the Philippines. League of Seagull Ltd. claimed registration in Colorado, but the SEC rejected any jurisdictional exemption for offering securities to Philippine investors without proper authorization.
Riscoin promoted its scheme through Telegram and Bonchat messaging platforms and had no Virtual Asset Service Provider certification from the SEC's PhiliFintech Innovation Office as of May 14.
🇵🇭 Filipino Impact
BG Wealth specifically targeted OFWs with ₱30,907 ($500) minimums through DSJ Exchange and messaging apps. The SEC's enforcement action protects Filipinos from schemes bypassing BSP's Virtual Asset Service Provider licensing requirements.
This article was written based on reporting from Newsbytes.
