The SEC of Philippines prohibits cloud mining contracts

The Securities and Exchange Commission of Philippines, like its American counterpart, is interested in prevention of various legal loopholes provided by the digital currency market. Now it has detected what it considers another way to illegally trade securities: cloud mining contracts.

Cloud mining contracts allow to take part in a joint remote mining enterprise and invest in a firm. The Commission doesn’t see here any difference with regular securities and even tells that those simply promoting such schemes are violating the law, too. The organization uses the case of Power Homes Unlimited vs. SEC, 2008 as a main argument.

Other countries do not seem to view cloud mining contracts as securities. The American SEC considers ICO tokens to be this kind of asset, but, as its chairman has lately clarified, not all digital tokens can be classified as such. In various countries of the world mining is taxed differently, but the aforedescribed legal practice of Philippines seems unique - 21 years in prison for this kind of activity looks like an unjustified penalty.