RISCOIN's Philippine Recruitment Drive: A Growing Concern That Regulators Are Now Taking Seriously

The SEC does not randomly alert anyone. When it publicly issues an alert, stating a specific group by name along with a list of dates and areas they have operated in — take this warning seriously. RiscSet is one of those groups that received this warning from the SEC.

A Coordinated, Nationwide Launch

The SEC states RiscSet commenced their first stall (in The Land Transportation Authority building in Manila) on September 19, 2024. They have continued to build their social media presence and conducted live recruitment events in various locations across the country, including Pangasinan, Metro Manila, Central Luzon, Central Visayas, Northern Mindanao, and Davao Region. What does this equate to? This is not a small group of people; this is an organized launch across most of the major population areas of the Philippines within months of RiscSet's first hire.

The Method Behind the Geography

What makes this worth understanding isn't just the geography. It's the method.

Scams that relate to investments don't declare themselves to be scams, instead they declare themselves as opportunities; they can be discovered on Facebook and in the barangay halls of your neighbours and relatives. By the time the SEC releases a formal advisory about these schemes, many people have already given hundreds or thousands of dollars to them.

RISCOIN organizes their structure in exactly the same way. The purpose behind both the online recruiter (social media) and the physical recruiter (on-the-ground) is very intentional; social media allows you to "reach out" to many people; the physicality of the meeting creates trust for you in your mind. You are more likely to credibly validate the legitimacy of something if a person you know personally guided you through it in person, demonstrated testimonials on a smart phone, and told you stories of others who also previously received a payout.

When the SEC refers to multiple regions, it does matter! For example, this is not one city or one province; its 3 separate markets — Pangasinan, Metro Manila, Central Luzon (the second largest demographic area). By moving through these areas in less than 1 year, we can conclude that RISCOIN is not disorganized; they are resourced. Central Luzon alone recorded a population of 12.99 million in the 2024 census Philippine Statistics Authority, placing it among the top three most populated regions in the country.

What Ordinary Filipinos Should Do

So what should ordinary Filipinos actually do with this information?

When making a decision to invest, you should take the first step by checking with the SEC and seeing if they have a legislature or regulatory organization that registers all investment companies. Although this seems simple enough, many individuals do not take the time to do this and rather, depend upon their recruiter or salesman to give them the name. This is also true with the SEC who has an online list and is searchable. If the company is not listed in this database, they are not registered with the SEC so you will not find a record of the investment company. You can verify directly through the SEC's official verification tool.

The second thing to do is to be suspicious of deals that guarantee you a return on your investment. There are no legitimate investments where you say to the individual that you will make a profit 100% of the time. The reason for this is that financial markets can go both up and down and if an individual claims that they can guarantee you a profit, either they are lying or the investment is more of a pyramid scheme than an investment. In the case of investments that have been under SEC investigation, the scheme allegedly involves exponential growth of investments across stages, contingent upon continuous deposits, with a minimum investment of USD500, or its equivalent of approximately PHP30,000. Philippine News Agency When you no longer have new people being recruited into the investment, then the investment will collapse.

The more difficult of these three rules to follow is number three — potential disappointment to the individual who referred you into the investment. Many individuals continue to lose money because they do not want to disappoint the individual who referred them. Recruiters rely on this discomfort for their success. The person will not care if you lose money; it is simply a part of the organization's design. One thing you should consider when determining if there are legitimate investments is that the person who recruited you into this activity could very well believe in the program that he or she is recruiting you into, but it is still not a reality.

The Weight of Physical Recruitment

According to the SEC, recruitment activities working in the physical space are not often considered. Few people give any thought to the fact that while a Facebook post could seem impersonal; someone coming to your town meeting to rent a function space, set up their presentation, etc., can lend an air of institutional legitimacy that no Facebook post can match. It's hard to shake that sense of legitimacy once it is created. In addition to this, the six areas identified by the SEC (Pangasinan, Metro Manila, Central Luzon, Central Visayas, Northern Mindanao and Davao) contain a significant amount of the total economic activity and population of the Philippines. The combined population of NCR, Central Luzon, and CALABARZON alone accounts for about 39.0 percent of the Philippine population Philippine Statistics Authority — and RISCOIN has recruitment networks across these regions, meaning the number of participants in this scheme is likely large.

How the Math Eventually Stops Working

Regardless of how many people were recruited by RISCOIN, would you like to know that not everyone has lost money yet. The way these types of structures work is they tend to pay in the first phase. This is part of the ongoing motivation for them to increase momentum. The people who have been paid are typically the most effective recruiters; they are not being dishonest in their own right, but simply because they have received a payment. The positive aspect of this is that at some point the mathematics of the structure will stop working.

The SEC warned that individuals acting as brokers, agents, promoters, recruiters, influencers or enablers for League of Seagull Ltd., Seagull Alliance or Riscoin may face criminal prosecution. Violations may carry penalties of up to 5 million pesos in fines or imprisonment of up to 21 years, or both. The SEC warning exists precisely because that math always stops working eventually.

The Information Gap Outside Metro Manila

It's interesting to see just how quickly these advisories will get out to people living outside Metro Manila. Urban areas tend to have quicker access to regulatory information. Certain regions, including Pangasinan, Northern Mindanao, etc., also have a lot of rural residents who will experience very different levels of financial literacy promotion and a much higher level of community trust in the value of personal referrals.

If you are living in one of the regions listed above and have been approached by someone promoting RISCOIN, your only option is to verify with the SEC first — before you do anything else. Not afterwards. Not "just to see." You must verify first.

The warning is out. The question is will people who need to see it get to see it in time?