The Philippines’ Securities and Exchange Commission (SEC) on Tuesday warned investors be cautious of ICOs involving cryptocurrencies, Reuters reported.
The regulator said it discovered that “certain companies, individuals or groups of persons” have been enticing the public to participate in ICOs through social media and their websites and to buy the corresponding virtual currency.
The Philippine SEC said that from information it gathered, “some of these new virtual currencies, based on the facts and circumstances surrounding their issuance, follow the nature of a security”.
“However, unlike ordinary securities, these virtual currencies are neither guaranteed by any Central Bank nor backed by any commodity,” it said.
The regulator said any sale of securities, including virtual currencies, must be duly registered, and the company or its agents making an offer must have the license to sell them.
The SEC warning follows a similar move last month by the Philippine central bank, which has also flagged risks of investing in virtual currencies.