Philippines SEC Warns XM for Offering Unauthorized Securities

Philippines SEC warns against XM for offering unauthorized securities; investors cautioned to verify platform legitimacy.

Key Points

• Philippines’ SEC warns against XM for unauthorized securities offering.
• The country’s securities regulator has accused  XM of illegal promotions targeting Filipino investors.
• Individuals promoting XM face potential criminal charges, SEC warns.

Online trading platform accused of running illegal promotional campaigns targeting Filipino investors.

The Securities and Exchange Commission (SEC) of the Philippines has raised red flags against XM, an online trading platform specializing in forex and crypto Contracts for Difference (CFDs), for allegedly offering unauthorized securities in the country. The SEC also explicitly stated in an advisory that XM lacks authorization to sell or offer securities to the public within the Philippines.

The SEC’s investigation revealed that XM, boasting over 1,000 trading instruments, round-the-clock trading of crypto CFDs, leverage ratios of up to 1000:1, and lucrative bonuses reaching USD 10,500, has been actively running promotional campaigns on various social media platforms. These campaigns allegedly entice investors, including Filipinos, to participate in trading activities on the XM platform.

Philippines SEC Warns XM for Offering Unauthorized Securities

The commission noted that XM‘s operator lacks registration as a corporation in the Philippines and does not possess the necessary license or authority to sell or offer securities, as defined under the Securities Regulation Code (SRC). According to Philippine regulations, the SEC requires companies to register securities they offer to the public. These companies must also ensure that a registered corporation or licensed dealer issues them and that the issuer holds a secondary license to sell or offer securities.

Consequently, the SEC has warned individuals acting as salesmen, brokers, dealers, promoters, or recruiters for XM within the Philippines of potential criminal liability under Section 28 of the SRC. Violators may also face a maximum fine of five million pesos (P 5,000,000.00), imprisonment of up to 21 years, or both.

In a statement, the SEC emphasized, “Those who act as salesmen, brokers, dealers, or agents, representatives, promoters, recruiters, influencers, endorsers, and enablers of the XM platform in selling or convincing people to invest in this platform within the Philippines even through online means may be held criminally liable.”

This warning follows a similar advisory against eToro, a global investment platform. Despite eToro’s international presence, the SEC reiterated its lack of authorization within Philippine jurisdiction, cautioning against promoting the platform.

As regulatory bodies worldwide tighten their grip on the cryptocurrency and forex trading industry, Filipino traders should exercise caution and verify the legitimacy of platforms before engaging in any investment activities.

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