RISCOIN, RISCOIN EXCHANGE, RISCOIN TRADING, LEAGUE OF SEAGULL LTD., & SEAGULL ALLIANCE

Securities and Exchange Commission Republic of the Philippines Department of Financ

ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT

IN THE MATTER OF:

TRADING", "LEAGUE OF SEAGULL LTD.", and "RISCOIN", "RISCOIN EXCHANGE", "RISCOIN "SEAGULL ALLIANCE"

SEC EIPD CD0 CASE No.: 2026-0003

CEASE AND DESIST ORDER

evidence of ongoing violations of the SRC and other rules and regulations being enforced by the Commission, the EIPD hereby issues this Cease and Desist Order, subject to the authority 2026 SEC Rules of Procedure on the issuance of Cease and Desist Order in relation to Section 53.3 and Section 64 of the Securities Regulation Code (SRC), upon finding of prima facie ("EIPD," for brevity) to protect the investing public, and in accordance with Rule XII of the Pursuant to the mandate of the Enforcement and Investor Protection Department

of the Commission En Banc and without prejudice to other proceedings.

individuals or groups of individuals identified as their purported leaders and/or agents, who entice the public to invest in the scheme of RISCOIN. of "RISCOIN," "RISCOIN EXCHANGE," "RISCOIN TRADING," "LEAGUE OF SEAGULL LTD.," and "SEAGULL ALLIANCE" (collectively referred to hereafter as "RISCOIN"), through This Commission has received reports and information on the solicitation activities

As contained in the reports and information gathered by the Commission, certain

through Facebook and/or other social media platforms and various messaging applications individuals or group of individuals representing RISCOIN are actively soliciting investments,

such as Telegram and Bonchat.

Further, based on the findings of the Department, RISCOIN is allegedly engaged in a

called "crypto managers." Investors are made to place their funds through the company's copy trading scheme wherein investors rely on trading signals purportedly issued by so-

various websites, input the corresponding signal details, and thereafter await the promised returns. These "crypto managers," who represent that they can generate unusually high and guaranteed daily returns from cryptocurrency trading, are believed to be fraudulent actors.

Office issued SEC ADVISORIES warning the public NOT TO INVEST or STOP INVESTING in any scheme offered by "RISCOIN" and to EXERCISE CAUTION in dealing with any individuals On 12 February 2026, the SEC Laoag Extension Office and SEC Zamboanga Extension

or group of persons soliciting investments for and on behalf "RISCOIN".

"RISCOIN", "RISCOIN EXCHANGE", "RISCOIN TRADING" "LEAGUE OF SEAGULL LTD.", and "SEAGULL ALLIANCE" SEC EIPD Case No.: 2026-0003 Cease and Desist Order In the Matter of. Page 2 of 7

supposed leaders, continue to actively solicit additional investments by presenting business registration certificates and/or permits purportedly issued by foreign jurisdictions. registration does not, by itself, authorize them to operate, solicit investments, or offer Securities within the Philippines. investing in or to cease any investment with "RISCOIN," the subject entities, through their However. assuming "RIScoIN" may be registered in other jurisdictions, such foreign Despite the issuance of these SEC ADVISORIES warning the public to refrain from

with the Commission either as a corporation or as a partnership; has not registered any of, and/or a license to sell securities; has not been issued any license to sell securities; and is proprietary shares or membership certificates and timeshares under Sections 8 and 12 of Monitoring Department (CRMD), Markets and Securities Regulation Department (MSRD) and Corporate Governance and Finance Department (CGFD), "RISCOIN" is not registered securities under Section 8 and 12 of the SRC; has not filed an application for the registration not a registered issuer of mutual funds, exchange traded funds and proprietary/non Based on the Certifications from the Commission's Company Registration and

the SRC.

Section 3.1 of the SRC defines "securities" as follows:

"3.1. "Securities" are shares, participation or interests in a corporation or in a commercial enterprise or profit-making venture and evidenced by a certificate, contract, instrument, whether written or electronic in character. It includes:

XXX

subscription; xxx" (b) Investment contracts, certificates of interest or participation in a profit-sharing agreement, certificates of deposit for a future

An investment contract is defined under Rule 26.3.5 of the 2015 Implementing Rules and Regulations of the SRC (the "SRC-IRR") as follows:

"An investment contract means a contract

primarily from the efforts of others. It is presumed to exist transaction or scheme whereby a person invests his money in a common enterprise and is Ied to expect profits

whenever a person seeks to use the money or property of others on the promise of profits.

A common enterprise is deemed created when two

more than a broker's commission." {Emphasis supplied) (2) or more investors "pool" their resources, creating a common enterprise, even if the promoter receives nothing

In the case of SEC v. Howey Co., the US Supreme Court defined an investment contract as a contract or scheme for the placing of capital or laying out of money in a way intended to

"LEAGUE OF SEAGULL LTD.", and "SEAGULL ALLIANCE" "RISCOIN"."RISCOIN EXCHANGE""RISCOIN TRADING" SEC EIPD Case No.: 2026-0003 Cease and Desist Order In the Matter of: Page 3 of 7

secure income or profit from its employment.1 Investment contracts have been used and adopted in various situations where individuals were led to invest money in a common enterprise with the expectation that they would earn a profit through the efforts of the

investment scheme, regardless of the legal terminology used, partakes of the nature of an U.s. Supreme Court came up with, and adopted the Howey Test3 in determining if an promoter or of someone other than themselves.2 It is in the context of the foregoing that the

investment contract.

which requires prior registration from the Commission. The case of Virata v. Ng Wee4 determining if a transaction or a scheme is a security in the form of an investment contract, Our Supreme Court thereafter adopted and consistently applied the Howey Test in

emphasized this, to wit:

Commission v. W.J. Howey Co., to determine whether or not the security being offered takes the form of an investment contract. The case served as the foundation for the domestic definition of the said security. named after the landmark case of Securities and Exchange "In this jurisdiction, the Court employs the Howey test,

made in a common enterprise; (4) expectation of profits; and (5) profits arising primarily from the efforts of others. an investment contract to exist: (1) a contract, transaction, or scheme; (2) an investment of money; (3) investment is Indubitably, all of the elements are present in the extant case." (Emphasis supplied) Under the Howey test, the following must concur for

Commission5 the Supreme Court ruled that in applying the Howey Test, the nature and the Moreover, in the case of Power Homes Unlimited Corp. v. Securities and Exchange

entirety of the transaction should be considered, consistent with the broad concept of "securities" in our jurisdiction, thus:

investment contract under R.A. No. 8799. Our definition of an "It behooves us to trace the history of the concept of an

investment contract traces its roots from the 1946 United States

transaction constituted an "investment contract" under the Court was confronted with the issue of whether the Howey (US) case of SEC v. W.J. Howey Co. In this case, the US Supreme

Securities Act's definition of "security." The US Supreme Court, recognizing that the term "investment contract" was not defined by the Act or illumined by any legislative report, held that "Congress was using a term whose meaning had been

2 Ibid. Although the definition as stated in the Howey Case qualified that the earning of profit was expected to be solely through the efforts of another party, Rule 26.3 of the 2015 IRR of the 'SRC replaced the qualifier with "primarily ", acknowledging that an investment contract may still be present where the individual who placed the money exerted a small amount of effort in an attempt 1 328 U.S. 293 (1946)

4 G.R. Nos. 220926, 221058, 221109, 221135 & 221218, July 5, 2017 5 G.R. No. 1 64182, February 26, 2008. 3 Ibid. to earn the profits.

"LEAGUE OF SEAGULL LTD.", and "SEAGULL ALLIANCE" "RISCOIN", "RISCOIN EXCHANGE", "RISCOIN TRADING" SEC EIPD Case No.: 2026-0003 Cease and Desist Order n the Matter0i Page 4 of 7

congressional intent to cover a wide range of investment transaction falls within the scope of an "investment contract." 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 transactions. It established a test to determine whether a

Known as the Howey Test, it requires a transaction, contract, or

Supreme Court stressed that the Howey Test "embodies a adaptation to meet the countless and variable schemes scheme whereby a person (1) makes an investment of money, {2} in a common enterprise, (3) with the expectation of profits, proponents must establish all four elements, the US flexible rather than a static principle, one that is capable of (4) to be derived solely from the efforts of others. Although the

the Securities Act, regardless of whether its issuer was engaged in fraudulent practices." (Emphasis ours) on the promise of profits." Needless to state, any investment contract covered by the Howey Test must be registered under devised by those who seek the use of the money of others

the investment scheme of "RISCOIN", where investments received from the public earns Applying the foregoing parameters established in jurisprudence, the EIPD finds that

guaranteed profits constitutes an offer/sale of unregistered securities as all the elements of the Howey Test are present, to wit:

First, there is an investment of money by the public in the investment scheme of "RISCOIN" who were enticed to invest in their scheme;

pooled in respondent "RISCOIN" allegedly in its copy trading scheme; Second, there is a common enterprise in the sense that the investors monies were

promised that their money would earn guaranteed returns; Third, there was clearly an expectation of profits on the part of its investors who were

Lastly, the profits are derived primarily from the efforts of others. Here the investors

in said entity. had no hand in the management of "RISCOIN" and earned profits by merely investing

Furthermore, the act of "RISCOIN" in carrying out its unauthorized investment-taking activities through social media, promoting its unauthorized investment schemes constitute public offering as defined under Rule 3.1.17 of the 2015 SRC IRR, to wit:

the public or to anyone, whether solicited or unsolicited. Any "3.1.17. Public offering is any offering of securities to

solicitation or presentation of securities for sale through any of the following modes shall be presumed to be a public offering:

X X X

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"LEAGUE OF SEAGULL LTD.", and "SEAGULL ALLIANCE" "RISCOIN". "RISCOIN EXCHANGE", "RISCOIN TRADING" SEC EIPD Case No.: 2026-0003 Cease and Desist Order Page 5 of 7

3.1.17.2 Presentation in any public or commercial place;

television, of communication;" (Emphasis supplied) information communication technology or any other forms 3.1.17.3 Advertisement or announcement in radio, telephone. electronic communications,

Section 8.1 of the SRc categorically provides that securities cannot be sold or offered for sale or distributed within the Philippines if the same are not registered with the Commission in the form of an approved Registration Statement and a Permit to Offer/Sell issued in favor of the applicant, to wit:

supplied} Securities shall not be sold or offered for sale or Prior such sale, information on the securities, in such form and with such substance as the Commission may prescribe, shall be made available to each prospective purchaser." (Emphasis distribution within the Philippines, without a registration statement duly filed with and approved by the Commission. "SEC. 8. Requirement of Registration of Securities. - 8.1

that "RIScOIN" through their Leaders and/or agents have no license to sell, offer, or deal with securities; neither have they caused the registration of the securities that they are In the instant case, the Certifications issued by the MSRD, CGFD, and CRMD all confirm

currently offering or selling. These circumstances warrant the immediate issuance of a Cease and Desist Order in order to protect the investing public.

that "RISCOIN" is not licensed to operate as a Crypto-Asset Service Provider (CASP), is not authorized to offer or deal in crypto-assets, or to provide any crypto-asset services within the Philippines, and neither has any pending application under the regulatory sandbox nor Furthermore, a Certification issued by the PhiliFintech Innovation Office confirms

has it been previously or is currently enrolled in the strategic sandbox of the Commission.

Relative to the issuance of a CDO, Section 64.1 of the SRC provides that the Commission may issue a CDO without the need for a prior hearing, when by its judgment, the act or practice will operate as a fraud upon investors or is otherwise likely to cause grave or irreparable injury or prejudice to the investing public, thus:

"Section 64. Cease and Desist Order.- 64.1.The

issue a cease and desist order without the necessity of a Commission, after proper investigation or verification, motu proprio or upon verified complaint by any aggrieved party, may

prior hearing if in its judgment the act or practice, unless restrained, will operate as a fraud on investors or is

prejudice to the investing public." (Emphasis supplied) otherwise likely to cause grave or irreparable injury or

The unauthorized investment scheme of "RIScoIN" likewise constitutes financial fraud as defined under the Republic Act. No. 11765 of the Financial Products and Services

"RISCOIN", "RISCOIN EXCHANGE", "RISCOIN TRADING" "LEAGUE OF SEAGULL LTD.", and "SEAGULL ALLIANCE SEC EIPD Case No.: 2026-0003 Cease and Desist Order In the Matter of Page 6 of 7

involving the promise or offer of profits or returns sourced from the investments or Consumer Protection Act (FCPA), which provide that any form of deceptive solicitation of investments from the public, which includes Ponzi schemes and such other schemes contributions made by the investors themselves, and the offering or selling of investment schemes to the public without a license, Considering that financial fraud is punishable under the FcPA, any act constituting the same should immediately be ordered to cease and desist by the Commission for the protection of the investing public.

cause grave injury or prejudice to the investing public.6 unregistered securities operates as a fraud to the public which, if unrestrained, will likely The act of "RISCOIN" through their Leaders and/or its Agents in selling/offering

Agents in selling/offering unregistered securities constitutes a continuing violation of the provisions of the SRC and the FCPA. Further, unless restrained, the act of "RISCOIN" through their Leaders and/or its

license necessarily operates as a fraud on investors, thus: Supreme Court ruled that the act of selling unregistered securities without the requisite In SEC vs. CJH Development Corporation (G.R. No. 210316, 28 November 2016), the

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

have authority to deal on such securities. Section 8.1 of the sale or distribution within the Philippines without a registration necessarily operate as a fraud on investors as it deceives SRC clearly states that securities shall not be sold or offered for the investing public by making it appear that respondents The act of selling unregistered securities would

statement duly filed with and approved by the SEC and that prior to such sale, information on the securities, in such form and with such substance as the SEC may prescribe, shall be made available to each prospective buyer." (Emphasis supplied)

WHEREFORE, premises considered, "RISCOIN", "RISCOIN EXCHANGE", "RISCOIN TRADING", "LEAGUE OF SEAGULL LTD.", and "SEAGULL ALLIANCE", through their Leaders and/or its Agents and their respective officers, directors, representatives, salesmen, agents, brokers, dealers, promoters, recruiters, uplines, influencers, endorsers, abettors, and enablers and any and all persons claiming and/or acting for and in their behalf, are hereby ordered to IMMEDIATELY CEASE AND DESIST from further engaging in activities of selling

6 Section 64 of the Securities Regulation Code.

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"LEAGUE OF SEAGULL LTD.", and "SEAGULL ALLIANCE" "RISCOIN" "RISCOIN EXCHANGE" SEC EIPD Case No.: 2026-0003 Cease and Desist Order "RISCOIN TRADING" Page 7 of 7

and/or offering for sale of unregistered securities in the form of investment contracts and/or license and/or permit to offer/sell securities are issued. other activities/transaction relative thereto, until the requisite registration and registration statements are duly filed with and approved by the Commission, and the corresponding

"RISCOIN", "RISCOIN EXCHANGE", "RISCOIN TRADING", "LEAGUE OF SEAGULL

promoters, representatives, salesmen, agents, investment team planners, mentors, enablers, LTD.", and "SEAGULL ALLIANCE", its leaders, agents, officers, operators, administrators,

influencers, assigns, conduit entities, subsidiaries, and any and all persons claiming and/or acting for and in their behalf are likewise directed to immediately CEASE their internet presence relating to the transactions and investment scheme covered by this Cease and Desist Order. The Commission through the EIPD will initiate the appropriate administrative and criminal action against any persons or entities found to act as solicitors, information providers, salesmen, agents, brokers, dealers or the like for and in their behalf.

Finally, , "RISCOIN", "RISCOIN EXCHANGE", "RISCOIN TRADING", "LEAGUE OF SEAGULL LTD.", and "SEAGULL ALLIANCE", its leaders, agents, and their respective officers, planners, mentors, enablers, influencers, assigns, conduit entities, subsidiaries, and any and all persons claiming and/or acting for and in their behalf are PROHIBITED from transacting any and all business involving funds in its depository banks, and from transferring. disposing, or conveying in any manner, any and all assets, properties, real or personal, including bank deposits, if any, of which the named persons herein may have interest, claim operators, administrators, promoters, representatives, salesmen, agents, investment team

or participation, whether directly or indirectly, under their custody, immediately to forestall grave damage and prejudice to all concerned and to ensure the preservation of the assets for the benefit of the investors without authority from the Commission.

Department, Markets and Securities Regulation Department, Corporate Governance and Finance Department and the Information and Communications Technology Department of Let a copy of this Order be furnished to the Company Registration and Monitoring

this Commission, the Bangko Sentral ng Pilipinas, the Department of Trade and Industry, the National Privacy Commission, the Department of Information and Communications Technology, and the relevant local government unit(s) for their information and appropriate action.

for general circulation. Further, let a copy of this Order be published on the official website of the Commission

In accordance with Section 64.3 of the SRC and Rule XI of the 2026 Rules of Procedure of the SEC, the Respondent may file a verified Motion to Lift the CDO with the EIPD within five (5) days from receipt of this Order.

FAIL NOT UNDER PENALTY OF LAW

SO ORDERED.

Makati City, 14 May 2026.

SHEARA L. LUPANGO-TAMAYO OfficerinChargeEIPD