Couple arrested over $19 million bitcoin scam in Philippines

(Shutterstock)
Updated 12 April 2018

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.


Johnson the Brexit ‘Hulk’ finally meets EU’s Juncker

Updated 34 min 12 sec ago

Johnson the Brexit ‘Hulk’ finally meets EU’s Juncker

  • Downing Street has confidently billed the Luxembourg visit as part of efforts to negotiate an orderly divorce from the union

LUXEMBOURG: British Prime Minister Boris Johnson met EU chief Jean-Claude Juncker for talks Monday insisting a Brexit deal is possible, despite deep skepticism from European capitals with just six weeks to go before departure day.
After a weekend in which he compared himself to comic book super-smasher Hulk, the British leader will enjoy a genteel working lunch of snails and salmon in Luxembourg with the EU Commission president.
Downing Street has confidently billed the Luxembourg visit as part of efforts to negotiate an orderly divorce from the union before an October 17 EU summit.
A UK spokesman said Johnson would tell Juncker that “progress has been made, given that before the summer recess many said reopening talks would not be possible.
“The UK needs to enact the referendum result and avoid another delay; the UK wants to deliver Brexit and move on to other priorities, and EU member states’ leaders want to renegotiate an orderly Brexit.”
But Brussels has played down talk of a breakthrough, insisting Johnson has yet to suggest any “legally operable” proposal to revise a previous withdrawal accord.
As he shook hands with Johnson, Juncker declared himself “cautiously optimistic” and insisted that “Europe never loses patience” despite the tortuous Brexit saga dragging on over three years.
Finland’s European affairs minister, Tytti Tuppurainen, who was chairing an EU ministerial meeting in Brussels, gave a more downbeat assessment, repeating the bloc’s long-standing complaint that London has simply not come up with detailed ideas for replacing the so-called “Irish backstop” section of the divorce deal.
“The European Union is always ready to negotiate when a proper proposal from the UK side is presented,” Tuppurainen said.
“So far I haven’t seen any proposal that would compensate the backstop.”
The EU’s chief Brexit negotiator Michel Barnier, who joined the leaders for their talks in Juncker’s native Grand Duchy, said last week he has “no reason to be optimistic.”
The European Parliament will this week vote on a resolution rejecting Johnson’s demand that the backstop clause be stripped from the deal.
Johnson insists this measure, which temporarily keeps the UK in the EU customs union, has to go if he is to bring the agreement back to the House of Commons.
But the accord will also have to win the support of the other 27 EU leaders and the European Parliament if Britain is not to crash out with no deal on October 31 — a scenario that businesses warn would bring economic chaos.
Johnson, in turn, boasts that he would rather be “dead in a ditch” than ask his European counterparts to postpone Brexit for a third time.
“Be in no doubt that if we cannot get a deal — the right deal for both sides — then the UK will come out anyway,” Johnson said, writing in the Daily Telegraph on Monday.
A UK spokesman said that Britain would refuse an extension even if one were offered.
It is difficult, then, to see what might come from the lunch. There is no plan for a joint statement, but Barnier will meet Britain’s Brexit minister Stephen Barclay for separate discussions.
Speaking to the BBC on Sunday, Barclay indicated that any post-Brexit transition period could be extended past 2020 in order to resolve issues with the border.
Johnson, meanwhile, compared himself to Marvel comics hero Hulk, the rampaging mutant alter-ego of a mild-mannered nuclear scientist.
“The madder Hulk gets, the stronger Hulk gets and he always escaped, no matter how tightly bound in he seemed to be,” Johnson told the Mail on Sunday.
Johnson’s strategy faces resistance at home, where rebel and opposition MPs have passed a law aimed at forcing him to seek a Brexit delay.
Britain’s Supreme Court will rule this week on a bid to overturn Johnson’s decision to suspend parliament and limit time to debate the crisis.
Barnier will address the European Parliament session in Strasbourg on Wednesday as MEPs vote to reaffirm and reinforce the EU Brexit stance — and insist that the backstop must stay.
After his lunch with Juncker, Johnson is due to meet Luxembourg’s Prime Minister Xavier Bettel. The pair will hold a joint news conference.