Public warned on bitcoin scams

AUTHORITIES are warning the public anew on online scams.

Securities and Exchange Commission (SEC) Enforcement and Investor Protection Department Assistant Director Lalaine Monserate is warning the public on the proliferation of online scams.

Monserate said the emerging scam today which is widely used online is transactions involving bitcoins, used as a form of digital currency, created and held electronically.

Monserate said the bitcoins are used to trade items as well as drugs and have been alerted to the National Bureau of Investigation and the Philippine Drug enforcement Agency.

"Scammers are always two steps ahead of us and we should be informed of this," Monserate said.

The SEC director added the virtual currencies are used to hook the public to invest in pyramiding schemes which promise to double money or buy products online.

Internet sources reveal bitcoins are not printed like money and are produced by people. It was invested by Satoshi Nakamoto, who published his invention on October 31, 2008 in a research paper called "Bitcoin: A Peer-to-Peer Electronic Cash system".

It was implemented as open source code and released in January 2009.

Monserate said if the bitcoin is used to buy products, it is the Department of Trade and Industry which deals with the issue but when the virtual currencies are used for investment, that is when the SEC comes in.

A company has already tried to register with the department according to Monserate with the primary business of bitcoins but as the SEC raising the red flag on these types of businesses, no permits were issued.

The SEC has earlier asked for an increase in budget next year for an intensified information drive on online scams.

Monserate said the campaign will include seminars, tri media releases as well as seminars for the public in a bid to educate and warn against investing bogus companies and losing hard earned cash.

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