Philippine Police Makes A Raid On China-Focused Cryptocurrency Scam

The Philippine police is in the latest cryptocurrency news, for reportedly raiding the offices of an alleged crypto scam which was targeting investors from China. As a report on September 15 by the local news outlet Inquirer.net showed, agents from the Bureau of Immigration, the Presidential Anti-Corruption Commission and the National Police’s Integrity Monitoring and Enforcement Group raided the offices of Grapefruit Services Inc. in Pasig City on September 11.

According to authorities, there was apparently a secret tip from the Chinese Embassy which claimed that the firm already defrauded thousands of investors in China. However, the Immigration Commissioner Jaime Morente told the news that the government in China cancelled the passports of all of the employees, which made them illegal workers in the country (Phillippines).

As many best cryptocurrency news sites reported, the Philippine police arrested 277 employees of the firm, all of whom were Chinese nationals.

According to one unnamed source who spoke to Inquirer.net, Grapefruit is the name of an authorized service provider of Golden Millennial Quickpay Inc. Ltd. which operates under a special license from the Cagayan Economic Zone Authority (CEZA).

Meanwhile, CEZA is a government-owned corporation which oversees the Cagayan Special Economic Zone and Freeport. This is a special economic area in the north of the country. This is also known as the Cagayan Freeport, a zone that aims to attract foreign and local investments.

Inquirer.net stated that the firm was operating outside of the designated zone and has run afoul of the Philippine financial regulations. At the start of this year, the Philippine Securities and Exchange Commission (PSEC) postponed the issuance of final regulations for initial coin offerings (ICO), having introduced a draft version in August 2018.

The Philippine police helped the PSEC write a draft, stating that the tokens emitted during an ICO should be classified as securities.

“Therefore, these should be registered with the Commission and necessary disclosures need to be made for the protection of the investing public,” the draft notes.

In February this year, CEZA announced a new set of rules governing digital asset token offerings, designed to regulate the industry and protect investors against acquisition of utility and security tokens.