SEC CDO CASE NO. 01-24-1750K CLUB / 50K CLUBB ONLINE SHOP / COMMUNITY HELP COIN (CHC) / CRYPTOMARKETERS / CRYPTOMARKETERS WORLDWIDE

EIPD

CS.E.C.

ADn 9 MAY 2025

Su u

Securities and Exchange Commission COMMISSION EN BANC Republic of the Philippines Department of Finance TIME:

WORLDWIDE 50K CLUB / 50K CLUBB ONLINE SHOP / COMMUNITY HELP COIN CRYPTOMARKETERS IN THE MATTER OF: (CHC) /CRYPTOMARKETERS

(EIPD) ENFORCEMENT PROTECTION AND DEPARTMENT INVESTOR Movant. SEC CDO CASE NO. 01-24-107

D X

27 May 2025 TO:

MONITORING DEPARTMENT Securities and Exchange Commission Bel-Air, Makati City, 1209 3rd Floor, St. Gregory Building Email: ku lawfirm@yahoo.com 4th Floor, SEC Headquarters, 7907 Makati Ave., Salcedo Village, ATTY. FRANCIS U. KU & ASSOCIATES 9000 Cagayan de Oro City COMPANY REGISTRATION AND Counsel for the Respondents 6th corner 17th Streets, Nazareth FINANCE DEPARTMENT Securities and Exchange Commission 8th Floor, SEC Headquarters, 7907 Makati Ave., Salcedo Village, Bel-Air, Makati City, 1209 ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT Securities and Exchange Commission 9th Floor, SEC Headquarters, 7907 Makati Ave., Salcedo Village, Bel-Air, Makati City, 1209 CORPORATE GOVERNANCE AND

SEC Bldg. Corner 14th and MARKETS AND SECURITIES Securities and Exchange Commission 17th Floor, SEC Headquarters, 7907 Makati Ave., Salcedo Village, Bel-Air, Makati City, 1209 SEC CAGAYAN DE ORO EXTENSION Tomasaco Del Lara Sts. Cagayan de Oro City OFFICE REGULATION DEPARTMENT A. Mabini St., cor. P. Ocampo St. Malate, Manila COMMUNICATIONS TECHNOLOGY Securities and Exchange Commission 3rd Floor, SEC Headquarters, 7907 Makati Ave., Salcedo Village, Bel-Air, Makati City, 1209 BANGKO SENTRAL NG PILIPINAS Services INFORMATION AND DEPARTMENT Office of the General Counsel and Legal

Resolution -- Transmittal Letter In the matter of: 50K CLUB,et al SEC CDO Case No. 01-24-107 Page 2 of 2

DEPARTMENT OF TRADE AND Trade and Industry Building. 361 Sen. Gil Puyat Avenue, Makati City DEPARTMENT OF INFORMATION AND COMMUNICATIONS TECHNOLOGY C.P. Garcia Avenue, Diliman, Quezon City INDUSTRY Legal Service Legal Service Pasay City Cagayan de Oro City NATIONAL PRIVACY COMMISSION Legal Division 5th Floor, Delegation Building. PICC Complex, Roxas Boulevard, CITY GOVERNMENT OF CAGAYAN DE City Legal Office 1st Floor, Executive Building, City Hall, ORO

GREETINGS:

in the above-entitled case, the original of which is now on file with this Office. Please take notice that on 08 May 2025,a RES0LUTION was issued

Makati City, Philippines

By Authority of the Commission:

ARMANDO A. PAN, JR. Comhission Secretary

Securities and Exchange Commission COMMISSION EN BANC Republic of the Philippines Department of Finance

PROTECTION DEPARTMENT, SHOP/COMMUNITY HELP COIN (CHC)/CRYPTOMARKETERS/ WORLDWIDE ENFORCEMENT AND INVESTOR In the Matter of: 50K CLUB/50K CLUBB ONLINE CRYPTOMARKETERS Movan't. SEC CDO Case No. 01-24-107 Promulgated: 08 May 2025

X

RESOLUTION

is the Verified Motion to Lift C.D.O. (the "Motion to Lift") filed by Michael C. Viola and 50K Clubb Online Shop on 21 February 2024, praying that be lifted,or modified to exclude Michael C.Viola ("Mr.Viola") and the 50K Assailed CDO reads: the Cease and Desist Order dated 29 January 2024 (the "Assailed CD0") Clubb Online shop (the "50k Clubb"). The dispositive portion of the For consideration of the Commission En Banc (the "Commission")

IMMEDIATELY CEASE AND DESIST from engaging in the unlawful/unauthorized solicitation, offer and/or sale of securities in the form of investment contracts and/or any other similar or related acts until the requisite registration statement is duly filed with and approved by the Commission. WHEREFORE,premises considered,Respondents 50K CLUB / 50K MICHAEL VIOLA, and their agents, salesmen, brokers, dealers, representatives, promoters, recruiters, uplines, influencers, endorsers, abettors and enablers and all persons, conduit entities and subsidiaries claiming and acting for and in its behalf, are hereby ordered to CLUBB ONLINE SHOP CRYPTOMARKETERS / COMMUNITY HELP COIN (CHC) CRYPTOMARKETERS WORLDWIDE,

of an order directing 5OK CLUB / 50K CLUBB ONLINE SHOP Investor Protection Department (EIPD) filed before the Commission, through the Office of the General Counsel, a Motion for Issuance of a Cease and Desist Order (the "Motion for CDO"), praying for the issuance COMMUNITY The records show that on 23 January 2023, the Enforcement and HELP COIN (CHC) CRYPTOMARKETERS

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referred to as the "CRYPTOMARKETERS") to cease and desist from offering, selling and/or dealing with securities for want of the requisite CRYPTOMARKETERS WORLDWIDE, MICHAEL VIOLA (collectively license.

and/or offer of unregistered securities in the form of investment finding that CRYPTOMARKETERS is engaged in the unauthorized sale contracts without the requisite license. On 25 January 2024, the Commission issued the Assailed CD0 after

to due process, specifically for failure of the EIPD to (a) provide them with participate in the investigation, which prevented them from defending themselves intelligently.1 the Assailed CDO is fatally infirm as it was issued in violation of their right copies of the complaints filed against them, and (b) allow them to In their Motion to Lift, Mr. Viola and the 50k Clubb maintained that

is warranted on the ground that: (a) they are allegedly not aware of any findings violates the tenets of fair play;2 (b) they are not engaged in that they are engaged in "online networking seminar" and "learning they earn from referrals allegedly does not make their business illegal;3 and (c) even if the transaction involves the offer/sale of securities Respondents cannot be held liable because their participation in the scheme was allegedly not established.4 complainants who have suffered monetary loss, and to shut down their business without giving them the opportunity to refute the Commission's cryptocurrency investment activities as their business permit indicates center,"where they merely teach/guide their clients to access different platforms which are not limited to CRYPTOMARKETERS,and the fact that Respondents further maintained that the lifting of the Assailed CDO

praying that the Motion to Lift be denied for want of merit, and the CDO be made permanent. The EIPD maintained that Mr. Viola and the 50k 64.2 of the Securities Regulation Code (SRC) specifically treats as confidential the investigation conducted by it, including the contents of the complaints subject thereof.5 Clubb were not denied of their right to due process, arguing that Section On 29 February 2024, the EIPD filed its Comment/0pposition

2 Ibid. pages 4 and 5 (citing Secretary of Justice v. Lantion). 3 Ibid. pages 9 to 11 (citing SEC v. Prosperity.com). 5 Comment/Opposition. Pars. 4 and 5. 4 Ibid. pages 12 to 13 (citing SEC v. Santos, Zapanta v. People and People v. Petralba). 1 Motion to Lift. page 3

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investment packages;7 and (c) CRYPTOMARKETERS are actually subscription packages, where actual transactions and investment of as partnerships or corporations, are offering and selling unregistered subscription packages are securities in the form of investment contracts, designed to lure the public into participating in their income-generating money and/or the buying of packages have been consummated in 50K Clubb, the office of Mr. Viola at Yacapin-Velez St., Cagayan de Oro City.8 showing that: (a) CRYPTOMARKETERS, which are entities not registered packages, while some of its members/promoters publicly presented their unauthorized investment scheme;6 (b) CRYPTOMARKETERS' investment recruitment activities, and passively earn in the continued sale of such encouraging its members to entice/invite more investors to purchase the that they are not engaged in the offer/sale of unregistered securities by securities in the form of investment contracts through its subscription The EIPD likewise refuted the claim of Mr. Viola and the 50k Clubb

conduct of a clarificatory hearing. directing the parties to file their respective position papers in lieu of the On 04 March 2024, an Order was issued by the Commission

the 50k Clubb, and the EIPD filed their Position Papers, where they Comment/Opposition, respectively. essentially reiterated their arguments in their Motion to Lift and On 15 March 2024 and 19 March 2024, Respondents Mr. Viola and

resolves to deny the Motion to Lift for want of merit. to Lift and the Comment/Opposition of the EIPD, the Commission hereby allegations, arguments, and evidence presented in support of the Motion After a careful examination and due consideration of the

denied of their right to due process. Mr. Viola and the 50k Clubb were not

complaints and the documents used in support of the Motion for CDO. while the investigation and all documents covered by the same, i.e., the the issuance of a CDO, the mantle of confidentiality is lifted the moment a EIPD's denial of their request to be furnished with copies of the Citing Section 64.2 of the SRC, Mr. Viola and the 50k Clubb argued that complaints filed and other documents obtained, are confidential prior to In their Motion to Lift, Mr. Viola and the 50k Clubb bewailed the

7 Ibid. pars. 10 to 16. 8 Ibid. Pars. 24, 26 and 27. 6 Ibid. pars. 7 and 8 (citing Power Homes Unlimited Corporation v. SEC).

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the documents upon which the same was based, are disclosed to the respondents who request for the same, otherwise, their right to due after a CDO is issued, the investigation and all the documents upon which the same is based must be fully disclosed/shared to them as the relevant information relating to the conduct of the investigation, and all process is violated. CDO is issued. Mr. Viola and the 50k Clubb are in effect suggesting that confidential status thereof ceases. In other words, it is Mr. Viola and the 50k Clubb's position that the validity of a CD0 can only be sustained if all

The Commission does not agree with Mr. Viola and the 50k Clubb.

of the investigation and the complaint filed, to wit: Sec. 64.2 of the SRC expressly provides for the confidential nature

underscoring supplied) an investigation has been initiated or that a complaint has been filed, including the contents of the complaint, shall be confidential. Upon issuance of a cease and desist order, the Commission shall make public such order and a copy thereof shall be immediately furnished to each person subject to the order. (Emphasis and 64.2 Until the Commission issues a cease and desist order, the fact that

triggered the same, are confidential; and (b) only the CDO will be made from confidential to non-confidential, after the issuance of the CDO contrary to the assertions of the Respondents. investigation and the complaint, including the contents thereof, which public, where a copy thereof is also furnished to all persons subject of the same. There is nothing in the said provision which provides for the modification of the status of the investigation and the complaint, i.e. The afore-quoted provision states in no uncertain terms that (a) an

Procedure (the "2016 Rules") is consistent in providing for the confidential nature of investigation proceedings, and any information obtained therefrom, to wit: Relatedly, Section 2-4 Part II Rule II of the 2016 SEC Rules of

by the Operating Department or the Commission En Banc. (Emphasis and underscoring supplied) Section 2-4. Confidentiality of Investigation Proceedings. Any non-public, unless otherwise required by any other pertinent law or information, document or records obtained by the Commission in the course of any investigation or examination shall be deemed

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and all documents obtained during the investigation are stripped of their the rule in statutory construction that what the law does not include, it SRC. The fact that only the "order" was specifically mentioned as being] made public, the contention of Mr. Viola and the 50k Clubb that complaint confidential status is clearly bereft of legal basis. This is consistent with during the conduct of the investigation to be made public after the issuance of a CD0, it would have expressly stated in Section 64.2 of the excludes.9 Had Congress intended the information/documents obtained

the requested documents, which are confidential in nature. denied of their right to due process when they were not given access to Verily, Mr. Viola and the 50k Clubb cannot be said to have been

have a legal basis. This rule was affirmed by the Supreme Court in be heard,either through oral arguments or pleadings, or to seek a reconsideration of the action or ruling complained of.10 If the record shows that the relevant parties were accorded such opportunity, the partakes of the nature of an administrative action where the demands of due process is satisfied when the respondent is given the opportunity to allegation that there was a denial of procedural due process will cease to Magcamit v. Internal Affairs Service-Philippine Drug Enforcement Agency,11 where it held that: Moreover, emphasis should be made of the fact that the instant case

action or ruling. For as long as the parties were given fair and Due process in administrative cases, in essence, is simply an opportunity to explain one's side or to seek a reconsideration of the reasonable opportunity to be heard before judgment was rendered, the demands of due process were sufficiently met.

reiterated in Pefianco v. Moral,12 where the Supreme Court also affirmed ruling that the right to due process is not violated if a party is not the confidential nature of administrative investigations, categorically The foregoing doctrine on administrative due process was

10 Vivo v. Philippine Amusement and Gaming Corporation,G.R. No. 187854, November 12, 2013 [Per J. 11 G.R. No. 198140, January 25, 2016 [Per J. Brion, Second Division] 12 G.R. 132248, January 19, 2000, [Per J. Bellosillo, Second Division]. 9 "It is a settled rule of statutory construction that the express mention of one person, thing, act, or consequence excludes all others. This rule is expressed in the familiar maxim expressio unius est exclusio alterius. Where a statute, by its terms, is expressly limited to certain matters, it may not, by restrict its meaning and to confine its terms to those expressly mentioned." (DBP v. COA, G.R. No. 221706, March 13, 2018 [Per J. Gesmundo, En Banc] interpretation or construction, be extended to others. The rule proceeds from the premise that the legislature would not have made specified enumerations in a statute had the intention been not to Bersamin, En Banc].

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informed of the findings and recommendations of the investigating the decision and is given the opportunity to seek reconsideration, thus: committee, it being sufficient that he/she is informed of the findings in

respondent in an administrative case is not entitled to be informed been accorded these rights. (Emphasis supplied) Moreover, there is no law or rule which imposes a legal duty on On the contrary, we unequivocally held in Ruiz v.Drilon that a of the findings and recommendations of any investigating committee created to inquire into charges filed against him. He is entitled only to the administrative decision based on substantial the charges and the evidence presented against her during the hearings of the investigation committee. Respondent no doubt had petitioner to furnish respondent with a copy of the investigation report. evidence made of record, and a reasonable opportunity to meet

Inc. v. SEC13 is instructive, to wit confidential, and in excluding Mr. Viola and the 50k Clubb from any which is to promptly curtail fraud and prevent injury to the investing public, is effectuated. The ruling of the Supreme Court in Primanila Plans, participation therein, is to ensure that the purpose and function of a CDO The objective of the law in classifying the investigation as

by the SEC motu proprio, it being unnecessary that it results from a is obliged to protect. (Emphasis and underscoring supplied) The law is clear on the point that a cease and desist order may be issued verified complaint from an aggrieved party. A prior hearing is also not required whenever the Commission finds it appropriate to issue a cease and desist order that aims to curtail fraud or grave or irreparable injury to investors. There is good reason for this provision, as any delay in the restraint of acts that vield such results can only generate further injury to the public that the SEc

irreparable injury or prejudice to the investing public. The Assailed CDO Section 64.1 of the SRC relative to the conduct of an investigation,and a adequately contained and provided for the factual and legal bases to support its issuance, which effectively informed Mr. Viola and the 50k them to refute the findings of the EIPD. The instant Motion to Lift as well as the Position Paper filed by Mr.Viola and the 50k Clubb,both of which reveals that the same has satisfied the requirements prescribed under determination that the act/transaction subject thereof, unless restrained, will operate as a fraud on investors, or is likely to cause grave or Clubb of the provisions of the SRC that were being violated;and allowed In the instant case, a careful examination of the Assailed CDO

13 Primanila Plans v. SEC, G.R. No. 193791, August 6, 2014 [Per J. Reyes, First Division].

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were given due course by this Commission, in fact embody the defenses relevant provisions of the SRC. presented by them in support of their claim that they did not violate the

notice, and the opportunity to be heard or to question the Assailed CDO denied of due process has therefore no leg to stand on. have been met. The claim of Mr.Viola and the 50k Clubb that they were Verily, the twin requirements of administrative due process, i.e.

to due process. In support thereof, Mr. Viola and the 50k Clubb, invoking investment-taking scheme was not established. their inability to confront the actual complainants, to be informed of the manner of the commission of the violation, and their exact participation rendered the Assailed CDO void as it was issued in violation of their right the cases of Cabahug v. People, People v. Petralba, SEC v. Santos and Zapanta v. People, where the Supreme Court ruled that the participation of the accused in a conspiracy to deal with unregistered securities must be proved before such accused can be convicted,argued that the Assailed CDO should be lifted since their participation in the unauthorized Mr. Viola and the 50k Clubb, nonetheless, vigorously insist that

Respondents' argument is bereft of legal basis and merit.

law in granting the Commission the authority to issue the same, which was explained by the Supreme Court in SEC v. CJH Development nature and relates to the exercise by the Commission of its regulatory and quasi-judicial powers. Mr. Viola and the 50k Clubb's arguments disclose Clubb are not applicable in the instant case, which is administrative in their inability to grasp the real nature of a CDO, and the purpose of the Corporation14, to wit: The doctrines laid down in the cases cited by Mr. Viola and the 50k

In the present case, it is clear from the dispositive portion of the CDO that its issuance is based on the findings of the SEC that there the Commission. Prima facie means a fact presumed to be true unless it means that the findings of the SEC, as contained in the assailed CDO can still be refuted and disproved by contrary evidence. This only means that the CDO is not final, is just provisional, and that the prohibition thereunder is merely temporary, subject to the determination of the parties' respective evidence in a subsequent exists prima facie evidence that respondents are engaged in the business of selling securities without the proper registration issued by disproved by some evidence to the contrary. Applied to the instant case,

14 G.R. No. 210316, November 28, 2016 [Per J. Peralta, Third Division].

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hearing. It is, therefore, clear that the subject CDO, being interlocutory, may not be the subject of an appeal. (Emphasis supplied)

entitled as a matter of right, to confront the complainant and his/her recovery of investments and damages,where the accused/respondent is Witnesses. which made a determination or finding on the liability of Mr. Viola and the 50k Clubb. This matter is within the jurisdiction and authority of the regular courts to make in a proper criminal action, or civil action for Being provisional in nature, there is nothing in the Assailed CDO

practice that constitutes a violation of its provisions.15 The purpose is threat/possibility that a violation will be committed, the CDO issued by a CDO issued motu proprio will, by express provision of law, stand, if anchored on a determination supported by substantial evidence that the damage the investing public. possibly sustain. Necessarily, as long as the violation subsists or the the Commission should subsist and continue to have full force and effect; acts or transactions being restrained will likely defraud, prejudice, or the Commission is duty-bound to issue a CDO, motu proprio or upon a complaint, if it finds or has a reason to believe, based on substantial evidence, that a person has committed, or is about to commit any act or essentially to protect investors and to prevent fraud/injury that they may otherwise, the purpose of Sec. 64 of the SRC will be negated. This also explains why the law does not require proof of actual damage or actual complainants as conditions precedent for a valid issuance of a CDO. Thus, As the national government agency tasked to implement the SRC,

Respondents are engaged in the unauthorized offer and/or sale of justifies the issuance (and the making permanent) of the Assailed unregistered securities in the form of an investment contract, which CDO.

they are not engaged in investment-taking activities as shown by their business permit, which allegedly provides that the services that they are In their Motion to Lift, Mr. Viola and the 50k Clubb maintained that

15 See Sections 53.3 and 64 of the SRC on the concept of CDO.

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authorized to provide are "online networking seminar," and running a clients who directly transact or trade with these different platforms,17 as "learning center."16 Under their business scheme, it is allegedly their well as with their own platform.18 Mr. Viola and the 50k Clubb nonetheless denied having solicited or accepted investments from the public, and maintained that the profits earned from referrals are not illegal, citing SEC v. Prosperity.com.19

Viola and the 50k Clubb, which are not supported by the evidence on record. Again, this Commission is not persuaded by the arguments of Mr.

regulation of the issuance and sale of securities, the prevention of fraud the securities acts of other jurisdictions, specifically the United States of construed in order to achieve the main purpose of its enactment-- America from which our securities laws are patterned, the SRC adopted a very broad definition of securities,20 which is intended to be liberally and protection of the investing public. At the outset, emphasis should be made on the fact that just like

definition of securities, as follows: (SRC-IRR) defines an "investment contract," which is covered by the Rule 26.3.5 of the Implementing Rules and Regulations of the SRC

An investment contract means a contract, transaction or scheme is led to expect profits primarily from the efforts of others. It is property of others on the promise of profits. (Emphasis supplied) whereby a person invests his money in a common enterprise and presumed to exist whenever a person seeks to use the money or

contract should thus include and cover all forms and varieties thereof which are known or considered, or ought to be known or considered to be such, in the financial world. This finds support in the US case of SEC v. the purported issuer is, or will be, using to further his/her business is Consistent with the broad definition of securities, the term investment money put in by the public who expects a return on their investment. The law considers investment contracts as securities because what

16 Verified Motion to Lift CDO. Pages 8 and 9 2o "Securities are shares, participation or interests in a corporation or in a commercial enterprise or 18 Ibid. 19 Ibid. pages 10 and 11 profit-making venture and evidenced by a certificate, contract, instrument, whether written or electronic in character." (Section 3.1 of the SRC) 17 Ibid.

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Joiner Leasing Corp.21 (which has persuasive effect in our jurisdiction), where the US Supreme Court emphasized that it is not the nature of the assets behind a particular instrument which defines whether the same should be considered a security,and what is controlling is the attribution given in commerce based on the terms thereof, to wit:

In applying acts of this general purpose, the courts have not been offering. The test, rather, is what character the instrument is given the economic inducements held out to the prospect. In the enforcement of an act such as this, it is not inappropriate that promoters' offerings be judged as being what they were represented to be. (Emphasis supplied) guided by the nature of the assets back of a particular document or in commerce by the terms of the offer, the plan of distribution, and

a flexible principle that is intended to cover schemes devised by persons who seek to use the money of others on the promise of profits, to wit: Power Homes Unlimited Corporation v. Securities and Exchange Commission,22 which ruled that the term "investment contract" embodies The afore-quoted doctrine was adopted by our Supreme Court in

the Howey Test must be registered under the Securities Act, regardless that "Congress was using a term whose meaning had been crystallized" under the state's "blue sky" laws in existence prior to the adoption of the Securities Act. Thus, it ruled that the use of the catch- all term "investment contract" indicated a congressional intent to cover a wide range of investment transactions. It established a test to determine whether a transaction falls within the scope of an transaction, contract, or scheme whereby a person (1) makes an investment of money, (2) in a common enterprise, (3) with the expectation of profits, (4) to be derived solely from the efforts of others. Although the proponents must establish all four elements, the US Supreme Court stressed that the Howey Test "embodies a flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits."Needless to state, any investment contract covered by of whether its issuer was engaged in fraudulent practices. (Emphasis supplied) The US Supreme Court, recognizing that the term "investment contract" Was not defined by the Act or illumined by any legislative report, held "investment contract." Known as the Howey Test,it requires a

contract is considered to exist once it is determined that the proponent Pursuant to the foregoing jurisprudential precepts, an investment

21 320 U.S. 344 (1943) [https:/supreme.justia.com/cases/federal/us/320/344/] 22 G.R. No. 164182, February 26, 2008 [Per J. Puno, First Division].

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is offering to the public an opportunity to contribute money and to share in the profits of the operations. From this perspective,the importance of a "common enterprise" managed by the proponent in furtherance of the business comes into play, considering that purchasers who are normally untrained in finance merely rely on the proponent's knowledge and expertise in carrying out the grand investment scheme.

where a person uses or intends to use money or property of others with a promise of profits is presumed by law to be an investment contract, which should be registered with the Commission prior to the offer/sale thereof. More importantly, in our jurisdiction, a transaction or scheme

sustaining the Assailed CDO for the protection of the investing public, to Clubb failed to controvert, shows that Mr. Viola and the 50k Clubb are indeed engaged in the unauthorized offer/sale of unregistered securities without the requisite license from the Commission, in violation of Sections 8 and 28 of the SRC. In particular, this Commission finds that all elements of the Howey Test are present, which necessitates and justifies Wit: The evidence submitted by the EIPD, which Mr.Viola and the 50k

First, an investigator of this Commission who transacted with Tina PhP6,000.00 to PhP240,000.00),with a potential yield of 240% to 300% of the amount invested depending on the package purchased within a period of sixty (60) to one hundred (100) days. The investigator, in fact, actually invested Php '6,000.00 with CRYPTOMARKETERS, where he was issued a temporary/written receipt as proof of such investment. This shows that under the business scheme of Respondents, members and/or potential investors makes (or are required to make) an investment of money. Guyo and May Labis, both of whom are members and promoters of CRYPTOMARKETERS, confirmed that the latter is offering investment packages ranging from US$100.00 to US$4,000.00 (equivalent to

Second, the investment packages23 which CRYPTOMARKETERS are is the common enterprise that CRYPTOMARKETERS has established. guaranteed returns and benefits when the maturity date arrives. The where a member who brings-in new investors receives bonuses, are the offering/selling, and which essentially constitutes their core business. and is currently maintaining. This common enterprise is being sustained by the investments which CRYPTOMARKETERS are receiving from the public who are made to believe that they will receive the marketing efforts, and the active promotion of the referral program

23 Basic (maximum share of 220%), Standard (maximum share of 240%), Premium (maximum share of 260%), Advance (maximum share of 280%), and Maximum (maximum share of 300%).

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tools used by CRYPTOMARKETERS to ensure their continued operations.24

a yield ranging from 240% to 300% of the amount invested within a the guaranteed returns and bonuses, which, in most, if not all, cases, is the sole reason for making such investment. equally shows that CRYPTOMARKETERS entices the investing public to invest their hard earned money because the same will yield huge returns. In particular, the presentation of May Labis showed/confirmed the investment scheme being offered/sold by CRYPTOMARKETERS where an investment ranging from US$100.00 to US$4,000.00 will have period of sixty (60) to one hundred (100) days. On top of this, CRYPTOMARKETERS also gives referral rewards,VIP bonuses, daily drip dividends, among others, to performing members. These, clearly creates an expectation on the part of the investors that they will receive Third, the presentation materials which the EIPD submitted in evidence

50k Clubb to pay existing members. These photos constitute substantial evidence that Ms. Guyo is a member of and/or is under the employ of Mr. Viola and the 50k Clubb, contrary to the bare denials of the latter. Fourth, the guaranteed returns/profits and bonuses which are promised to investors are generated their cohorts, who make sure that the recruitment and rewards system are implemented to ensure continued inflow of investments. In this regard, the photos showing Ms. Guyo making the presentation on the investment scheme of Mr. Viola and the 50k Clubb in their very office the efforts of their members who actively market the unregistered securities sustain the common enterprise and enables Mr. Viola and the entrepreneurial and marketing efforts of Mr. Viola, the 50k Clubb and (including a group photo of Ms. Guyo and poseur investor) affirm that primarily fromthe

in CRYPTOMARKETERS platforms, as well as in other platforms not owned by the latter, to wit: Clubb themselves admitted that their investment packages,as well as the investment packages offered/sold by other platforms, are actually being traded online, and that it is their clients themselves who transact or trade The records equally disclose that no less than Mr. Viola and the 50k

knowledge to persons who are interested to earn money from different service of teaching their clients access to the different platforms Respondents and their staff are techno-savvy and share their trading platforms in the internet. Respondents merely provide the and these are not limited to Cryptomarketers/Cryptomarketers Worldwide or the Community Help Coin. Respondents are not

24 See Motion for Issuance of CDO. Annexes "A-4" (Mr. Viola publicly discloses his goal to recruit 20 people); "A-7" (Become a Promoter/Advertiser Program).

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owners of these online platforms nor are they agents or branches of the same.

guarantee of a fixed income. They did not invest money with decisions. Respondents have no share in the income. There is no respondents.25 (Emphasis and underscoring supplied) The clients are the ones who transact or trade with these different transact with it. Their earnings come from their own business platforms. They are the ones who download the platform and

that Mr. Viola and the 50k Clubb's unauthorized offer/sale of records of any evidence that controverts this established fact, save for Mr. unregistered securities was established and proven by substantial evidence. This Commission equally takes cognizance of the absence in the Viola and the 50k Clubb's bare allegations and denials, which are not equivalent to proof.26 Prescinding from the foregoing, this Commission finds and so holds

national economy, and the State considers these transactions as being imbued with public interest, which is subject to regulation.27 transactions involving securities affect the general public and the categorical in stating that "[s]ecurities shall not be sold or offered for sale or distribution within the Philippines, without a registration statement duly filed with and approved by the Commission", and "[n]o person shall engage in the business of buying or selling securities in associated person of any broker or dealer unless registered as such with the Commission." The reason for this requirement is that all the Philippines as a broker ore dealer, or act as a salesman, or an Sections 8 and 28 of the Securities Regulation Code (SRC) is

for and on its behalf, intends a public offering or distribution of subsisting connection between the company or the person making the offer prescribed under the SRC are applicable if the issuer, or anybody acting securities.28 Whether a particular transaction involves a public offering and the persons to whom the offer is made as friends, customers, or co- Commission has consistently held that the registration requirements adventurers, etc. or are the persons mere outsiders? If they are mere depends on the attendant circumstances; the test is: "[i]s there a sufficient In implementing the foregoing statutory provision, the

27 Abacus Securities Corporation v. Ampil, G.R. No. 160016, 27 February 2006 [Per J. Panganiban, First 25 Position Paper dated 12 March 2024. Page 13. 26 Rogelia Gatan and the Heirs of Bernardino Gatan v. Jesusa Vinarao and Spouses Cabauatan, G.R.No. 28 SEC-OGC Opinion No. 04-09, Re: Registration of Securities, 16 February 2009. 205912, 18 October 2017, citing Domingo v. Robles, 453 SCRA 812, 818 [2005] [Per J. Leonardo-De Castro, First Division]. Division]

SEC CDO Case No. 01-24-107 In the matter: 50K Club, et al. RESOLUTION Page 14 of 16

outsiders the offer is made to the public; and in such case, the fact that the offer is made to a limited class, e.g., to members of a single company (not being the company offering its shares), or to members of a few

public."29 particular class of companies, does not make it less an offer to the companies, or to members of a particular profession, or to investors in a

requirements in Sections 8 and 28 of the SRC that we support the validly issue the same. It is sufficient that the Commission determines irreparable injury or prejudice to the investing public. In this regard, development of the capital market and protect the investing public. Hence, the grant of authority to issue a CDO under Section 64 of the SRC does not require that there be actual fraud before the Commission can that an act or practice will operate as a fraud or is likely to cause grave or granted to the Commission to issue a CDO on the basis of a determination that an act/transaction would cause grave or irreparable injury to the consumers, were recognized and retained by the Congress in recent legislation, i.e., the FCPA. The reason for the foregoing was explained by the Supreme Court in Primanila Plans, Inc. v. SEC,30 to wit: emphasis should be made of the fact that the power and authority It is by implementing and strictly enforcing the registration

results can only generate further injury to the public that the SEC by the SEC motu proprio, it being unnecessary that it results from a verified complaint from an aggrieved party. A prior hearing is also not required whenever the Commission finds it appropriate to issue a cease and desist order that aims to curtail fraud or grave or irreparable injury to investors. There is good reason for this provision, as any delay in the restraint of acts that yield such is obliged to protect. The law is clear on the point that a cease and desist order may be issued

XXXXXX XXX

the SEC. Primanila was then barred from selling and offering for sale the said plan product. A continued sale by the company would operate as fraud to its investors, and would cause grave or irreparable injury or prejudice to the investing public, grounds which could justify the issuance of a cease and desist order under Section 64 of the SRC.Furthermore, even prior to the issuance of the subject cease and desist order, Primanila was already enjoined by the SEC from selling and/or offering for sale pre-need products to the It is beyond dispute that Primanila plans were not registered with

30 G.R. No. 193791, August 6, 2014 [Per J. Reyes, First Division]. 29 Ibid.

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pre-need pension plans for 2008. (Emphasis supplied) to renew its dealer's license for 2008, prompting the SEC's NTD to issue selling and/or offering for sale pre-need plans to the public. It also had not obtained a secondary license to act as dealer or general agent for public.The SEC Order dated April 9,2008 declared that Primanila failed a letter dated January 3, 2008 addressed to Primanila's Chairman and Chief Executive Officer Eduardo S. Madrid, enjoining the company from

with securities, its continued offer and sale of investment packages, which are unregistered securities, constitute a continuing violation of Sections 8 and 28 of the SRC. There is therefore no reason to lift the any license issued by the Commission authorizing it to offer, sell, or deal Assailed CDO. Considering that Mr. Viola and the 50k Clubb were not able to show

investing public can utilize; Mr. Viola and the 50k Clubb are without a license from the Commission. internet website of a 15 megabyte capacity, rather than an investment in instant case. Here, what Mr. Viola and the 50k Clubb are offering/selling are unregistered investment packages which are made available and investment packages with guaranteed returns and bonuses through the on the condition that the latter entrusts their hard-earned money to Respondents. This is an offer/sale of securities which cannot be done reliance in the case of SEC v. Prosperity.Com Inc.31 to be misplaced as it involves the sale of a tangible product of some value to them, i.e., an an enterprise that could generate profits for them. Thus, the Supreme platforms of the CRYPTOMARKETERS, and other distributors. What is being sold by Mr. Viola and the 50k Clubb is not a product which the offering/selling to the public an opportunity to generate passive income Court ruled that the clients therein do not make investments, but pay for the use of the website. These factual circumstances are not present in the distributed using their platforms. The investing public is enticed by the Finally, this Commission finds Mr. Viola and the 50k Clubb's

findings in the Assailed CDO. Accordingly, the Assailed CDO should be sustained and made permanent. and jurisprudence, this Commission finds no cogent reason to disturb the Applying the foregoing rules and parameters entrenched in law

and Desist Order dated filed by Respondent Mr. Viola, and 50K Clubb ORDER issued on 25 January 2024 is hereby made PERMANENT. Online is hereby DENIED for lack of merit. The CEASE AND DESIST WHEREFORE, premises considered, the Motion to Lift the Cease

31 G.R. No. 164197, January 25, 2012 [Per J. Abad, Third Division].

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and Industry, the National Privacy Commission, the Department of Information and Communications Technology, and the relevant local government units (s) for their information and appropriate action. Regulation Department, Corporate Governance and Finance Department, and the Information and Communications Technology Department of this Commission, the Bangko Sentral ng Pilipinas, the Department of Trade Registration and Monitoring Department, Markets and Securities Let a copy of this Resolution be furnished to the Company

coordination with other concerned departments, is FURTHER DIRECTED to submit a formal compliance report, by way of a pleading. to the Commission En Banc WITHIN TEN (10) DAYS from receipt of this Resolution. The Enforcement and Investor Protection Department, in

SO ORDERED. Makati City,Philippines.

EMILVOB Chai rson AQUINO

JAVEY UCommissioner Y PAUL D. FRANCISCO Commissioner KARLQ S.BELLO

MCJILL BRYANT T.FERNANDEZ Commissioner ROGELIO V.QUEVEDO* Commissioner

*On Official Business