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Editing by Nathaniel Cajuday
- The SEC issued a warning against Gameloot Advertising Services for scamming investors through a play-to-earn game scheme.
- Gameloot requires investors to register and pay a subscription fee to play one of six games, with the promise of earning 50-150% profit after 8 or 28 days.
- The SEC determined that Gameloot’s scheme constitutes an “investment contract” and therefore is not a registrable security and is not authorized to sell securities to the public. The SEC advises the public not to invest in Gameloot.
With the still-growing popularity of “easy money” earning schemes through play-to-earn games, the Securities and Exchange Commission (SEC) issued another warning to a firm taking advantage of this trend to scam investors.
In a December 13 advisory, the Commission issued a warning against Gameloot Advertising Services and the individuals or group of individuals claiming to represent it for enticing the public, through social media, to invest in the said entity and offering them the “luxury of earning while playing the games.”
To get into the scheme, Gameloot requires investors to register first, where they can choose from any of the six types of games. In every game they choose, there is a corresponding subscription fee worth ₱1,000.00 up to ₱250,000.00.
According to the SEC, the entity is offering an enticing investment return of 50% up to 150% profit after eight days or after 28 days, depending on the games the investors choose to subscribe to. Also, an investor can earn 10% for every referral subscription, a 2% party bonus, and a 2.5% cashback bonus.
The Commission noted that Gameloot’s scheme utilizes an investment contract, which is when “there is an investment or placement of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others.”
However, as per the Securities Regulation Code (SRC), an entity is required to be duly registered with the Commission, and the concerned entity and its agents should have the appropriate registration and/or license to sell such securities to the public.
“Based on the Commission’s database, GAMELOOT ADVERTISING SERVICES is NOT REGISTERED as a corporation or partnership and OPERATES WITHOUT THE NECESSARY LICENSE AND/OR AUTHORITY to solicit, accept, or take investments/placements from the public nor to issue investment contracts and other forms of securities defined under Section 3 of the Securities Regulation Code (SRC),” the SEC revealed.
In addition, the regulatory authority highlighted that the scheme employed by Gameloot Advertising Services has the characteristics of a “Ponzi Scheme.” It is a scheme where money from new investors is used to pay “fake profits” to prior investors and is designed mainly to favor its top recruiters and prior risk takers and is detrimental to subsequent members in case of a scarcity of new investors.
“The offering and selling of securities in the form of investment contracts using the ‘Ponzi Scheme’ which is fraudulent and unsustainable, is NOT a registrable security. The Commission will not issue a License to Sell Securities to the Public to persons or entities that are engaged in this business or scheme,” the Commission concluded.
Accordingly, the SEC reminded the public not to invest in or stop investing in the investment scheme being offered by Gameloot Advertising Services and its representatives.
Find more SEC advisories here: https://bitpinas.com/tag/sec-advisory/
This article is published on BitPinas: LUXURY OF EARNING WHILE PLAYING GAMES? SEC Releases Advisory vs Gameloot for a Potential Ponzi Scheme
Disclaimer: BitPinas articles and its external content are not financial advice. The team serves to deliver independent, unbiased news to provide information for Philippine-crypto and beyond.
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