There is a mining contract scheme that people are discussing and making rounds on the web called “Mining City” or “Bitcoin Vault”. The Philippine SEC recently issued a warning against the operation and the alleged masterminds behind the project.
One thing is for sure, there have been numerous Ponzi cryptographic operations over the years and they typically attract many users before they crumble. However, as the story goes with any pyramid scheme when the project crashes, only the top leaders make it through with all the money.
A particular pyramid scheme called “Mining City” is a cloud mining operation that pays users in a token called the Bitcoin Vault or BTCV. Mining City claims it has an off-site datacenter full of mining platforms, and the project sells cloud mining contracts to investors.
Mining City sells cloud mining contracts in multi-year term packages, and depending on the hashrate purchased, the packages can go up to over $ 12,000 + one contract. Those who are dedicated to the project on crypto forums and social media platforms promise investors $ 100 in returns paid in BTCV.
The Mining City and BTCV schemes were allegedly invoked by project CEO Gregory Rogowski, Filipino group leader Anthony Aguilar and Jhon Rey Gray. The value of BTCV is listed on the coin’s market cap aggregator, Coingecko and the token hit an all-time high of $ 489 on August 1, 2020. The Mining City token has dropped -85.27% since then and it is now trading for $ 72 per BTCV.
There are numerous reports and studies showing that the Mining City project is a pyramid scheme and the results point to a myriad of red flags. On September 10, 2020, the Philippines Securities and Exchange Commission (SEC) issued a warning about the Mining City operations.
The Philippine SEC calls Mining City a cheeky Ponzi and claims that “so-called smart contracts or Mining City Contracts participate in the nature of the securities in the form of investment contracts under the Commission’s regulatory jurisdiction.”
The Philippine SEC adds:
The aforementioned scheme used by Mining City clearly shows an indication of a possible Ponzi scheme in which new investor money is used to pay “fake profits” to those who invested first.
The regulator also points out that investors “should not invest” in Mining City or “stop investing” in the project. The SEC reminds investors that it will not be able to protect them when the Ponzi deal crumbles because it “is not covered by prudential and market conduct requirements.”
Despite the Philippine SEC’s condemnation, the terms “Bitcoin Vault” or “Bitcoin Vault Price” are sudden searches on Google Trends. Additionally, tech giants like Twitter, Facebook, and Youtube allow the mining town of Ponzi to thrive, as thousands of posts and videos can be found on these platforms.
According to Mining City representatives, the project wholeheartedly refutes the claims made by the financial regulator. In one particular article, Mining City leaders claim that “[Philippines SEC] the ad appears to be the result of incorrect information posted by individuals in the Philippines. “
The Philippines SEC warning, however, says the regulator may also pursue criminal liability against the Youtube channel called “Crypto Knight Miner”. Additionally, if charged, Mining City operators could face fines of up to five million pesos (over $ 100,000) and 21 years in prison.
What do you think of the Philippine SEC’s recent warning about Mining City? Let us know what you think in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons, Philippines SEC,
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