A report released by the Securities and Exchange Commission (SEC) said that a new cryptocurrency, Xian Coin, is possibly a scam or ponzi scheme. According to SEC, Xian Coin is not registered within SEC as a corporation nor a partnership and should not be eligible for public investments under section 8 chapter 28 of the Securities Regulations Code.
In addition, Xian Coin is not registered with the Virtual Assets Service Provider (VASP) under the Bangko Central Pilipinas (BSP) Circular No. 1108 series of 2021.
The SEC also said that Xian Coin does not have a ‘white paper’. This document is an important legal form that discusses the details and development of the business, along with its evolution and form of business. Because Xian Coin does not have this critical document, the investment for this new cryptocurrency is very suspicious and dubious.
Because of the lack of necessary legal papers, the SEC has concluded that users should not invest in Xian Coin, indicating it as a Ponzi Scheme. A “ponzi scheme” is, in many regards, similar to an MLM, except there’s no legal physical goods present, where money from investors is used to gain ‘fake profit’ to pay prior investor and relies on recruiting rather than selling goods.