Couple arrested over $19 million bitcoin scam in Philippines

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Updated 12 April 2018
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Couple arrested over $19 million bitcoin scam in Philippines

  • Authorities and experts warn of 'high risk' of investing in cryptocurrencies .
  • “Glowing reviews and optimistic projections have been heaped on the Philippine economy, particularly regarding its financial system.

MANILA: Philippine authorities have warned the public to be wary of the criminal use of cryptocurrencies after the arrest of a couple for allegedly defrauding more than 100 people who poured at least 1 billion Philippine pesos (more than $19 million) into their bitcoin investment scam.

The Philippine National Police (PNP) earlier this week presented Arnel Ordonio and his wife, Leonady — the registered owners of NewG Bitcoin Trading, which was allegedly involved in cryptocurrency trading — to the media. The couple, both in their 20s, were arrested by the PNP Criminal Investigation and Detection Group (CIDG) last April 4 after an entrapment operation.

The suspects actively promoted NewG through social media and convinced people to invest with the promise that they would get large guaranteed returns on their money in the span of two weeks. 

Some of their victims, however, said that in December last year they began to sense that they had been duped after they were unable to contact the suspects, who by then had posted on social media that they could no longer issue a payout to investors. 

CIDG chief Director Roel B. Obusan told Arab News that complainants against the couple continue to arrive in their office, while others have reported them to the National Bureau of Investigation. “So this is really a large-scale scam,” he said.

Based on their initial assessment, Obusan said that the suspects had amassed up to 1.6 billion Philippine pesos. Some of their alleged victims have refused to file a formal affidavit of complaint. “So from those who gave their formal complaint, the money swindled by the suspects amounted to 900 million Philippine pesos,” Obusan said. 

For those considering joining the cryptocurrency craze, Obusan warned: “There’s no investment that can give that much (a very high profit). If the offer seems too good to be true (they better think twice).”

Stephen Cutler, a former US FBI anti-money laundering and financial crime expert, said the biggest advantage that bitcoin scammers had was the lack of knowledge on the part of victims, “which is the case with any fraud.”

“Bitcoin is a very complex technology and unfortunately many Filipinos, or many people around the world, are not taking the time to study and to understand what it’s all about. And so they’re getting involved in it thinking that it’s easy, that it can be another get-rich-quick scheme, and it’s not,” he told Arab News.

“I personally do not recommend that people have anything to do with bitcoin or any of the cryptocurrencies at this point in time because it is so new. The technology is still evolving and we just don’t know enough about it yet to make it safe,” he said.

“It is not well regulated in any country around the world” and when an investor loses money “there is no recourse to try to get their money back,” Cutler said. 

However he added that: “Bitcoin is definitely real.”

Meanwhile, Sen. Sonny Angara said that despite the country’s economic gains, there was a need to improve the financial literacy of Filipinos “to enable them to be a part of inclusive growth as well as equip them with skills that will protect them against scams.”


“Glowing reviews and optimistic projections have been heaped on the Philippine economy, particularly regarding its financial system. Opportunities abound on account of these developments but many Filipinos do not even have a basic grasp of economic and financial concepts,” Angara said.

According to the senator, the recent discovery of the Ordonios’ fraudulent bitcoin investments only illustrates that Filipinos are  lacking in financially literacy as they are still falling prey to schemes that promise huge returns in a short span of time.

“This is not the first time that we have seen scams that have victimized our hapless kababayan (citizens) whose only intention is to earn legitimate income for their families. Their lack of knowledge of the financial system and investment, however, will only continue the cycle of victimization if we do not address this,” Angara said.

The Bangko Sentral ng Pilipinas (BSP), or central bank, in an infographic distributed for the public, highlighted that “virtual currencies  (VCs) are not legal tender in the Philippines since they are not issued nor guaranteed by the BSP or any government authority.”

“The BSP does not license VCs nor endorse VC as a currency or investment instrument,” it said.


Venezuela ‘on alert,’ closes Curacao border ahead of aid shipment

Venezuela's Defense Minister Vladimir Padrino Lopez attends a news conference in Caracas, Venezuela, February 19, 2019. (REUTERS)
Updated 33 min 11 sec ago
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Venezuela ‘on alert,’ closes Curacao border ahead of aid shipment

  • Despite sitting on the world’s biggest oil reserves, Venezuela is gripped by a humanitarian crisis, with a shortage of food and medicine

CARACAS: Venezuela’s military said Tuesday it was on “alert” at its frontiers following threats by US President Donald Trump and ordered its border with Curacao closed ahead of a planned aid shipment.
Opposition leader and self-declared interim president Juan Guaido vowed to bring aid in from various points Saturday “one way or another” despite military efforts to block it.
But commanders doubled down on their allegiance to President Nicolas Maduro after Trump warned them to abandon him.
“The armed forces will remain deployed and on alert along the borders... to avoid any violations of territorial integrity,” said Defense Minister Vladimir Padrino.
Regional commander Vladimir Quintero later confirmed media reports that Venezuela had ordered the suspension of air and sea links with Curacao and the neighboring Netherlands Antilles islands of Aruba and Bonaire.
Shipments of food and medicine for Venezuelans suffering in the country’s economic crisis have become a focus of the power struggle between Maduro and Guaido.
Aid is being stored in Colombia near the Venezuelan border and Guaido aims also to bring in consignments via Brazil and Curacao.
A Brazilian presidential spokesman said the country was cooperating with the United States to supply aid to Venezuela but would leave it to Venezuelans to take the goods over the border.
Maduro says the aid plan is a smokescreen for a US invasion. He blames US sanctions and “economic war” for Venezuela’s crisis.

Guaido, the 35-year-old leader of the Venezuelan legislature, has appealed to military leaders to switch allegiance to him and let the aid through.
He has offered military commanders an amnesty if they abandon Maduro.
But the military high command has so far maintained its public backing for Maduro — seen as key to keeping him in power.
“We reiterate unrestrictedly our obedience, subordination and loyalty” to Maduro, Padrino said.
Guaido posted a series of tweets calling by name on senior military leaders commanding border posts to abandon Maduro.
He has branded Maduro illegitimate, saying the elections that returned the socialist leader to power last year were fixed.
The United States and some 50 other countries back Guaido as interim president.
Trump has refused to rule out US military action in Venezuela. He raised the pressure on Monday, issuing a warning to the Venezuelan military.
He told them that if they continue to support Maduro, “you will find no safe harbor, no easy exit and no way out. You will lose everything.”
Padrino rejected Trump’s threat, branding the US president “arrogant.”
If foreign powers try to help install a new government by force, they will have to do so “over our dead bodies,” Padrino said.

Despite sitting on the world’s biggest oil reserves, Venezuela is gripped by a humanitarian crisis, with a shortage of food and medicine.
It has suffered four years of recession marked by hyperinflation that the International Monetary Fund says will reach 10 million percent this year.
An estimated 2.3 million Venezuelans have left the country since 2015.
Guaido says 300,000 people face death without the aid but Maduro denies there is a humanitarian crisis.
Padrino said the military would not be “blackmailed” by “a pack of lies and manipulations.”
Maduro said that 300 tons of Russian aid would reach Venezuela on Wednesday. He previously announced the arrival of goods from China, Cuba and Russia, his main international allies.
In a series of tweets, Guaido urged supporters to write to the generals “from the heart, with arguments, without violence, without insults,” to win them over.

Guaido says he has enlisted the support of 700,000 people to help bring in the aid on Saturday and is aiming for a million in total.
He thanked Britain, France, Germany, Italy and Spain for pledging “more than $18 million for the humanitarian aid.”
British entrepreneur Richard Branson said he will hold a pro-aid concert just over the border in Colombia on Friday.
British rock star Peter Gabriel and Colombian pop singer Carlos Vives are among those scheduled to perform.
Former Pink Floyd singer Roger Waters weighed in on Maduro’s side in a video broadcast on Venezuelan state media, criticizing Branson and Gabriel and said the aid was being politicized.
Maduro’s government plans to stage a rival concert on its side of the border.