- Mining City is a cloud mining project based in the Philippines. It has been labeled a Ponzi scheme by the Philippine Securities and Exchange Commission
- The scam is soliciting up to $12,600 per month for non-existent mining contracts
- Cloud mining has long been attractive means to crypto scammers
Mining City has been highlighted as another in the myriad of Bitcoin cloud mining scams by the Philippine Securities and Exchange Commission (SEC).
Last week, the agency highlighted the website as another example of the schemes where investors pay a monthly fee in anticipation of receiving a portion of monthly Bitcoin mining returns when, in fact, they are being paid out the fees from new entrants.
Mining City is a Very Obvious Type of Ponzi Scheme
The SEC posted the warning over Mining City late last week following “numerous reports and information gathered by the Commission,” stating that it is not registered with the commission and has no license to operate within the country.
Mining City claims to sell mining contracts for a monthly fee in a similar story, requesting from investors to pay up to $12,600 per month, with their costs allegedly renting out Bitcoin mining equipment. The organization then claims to mine Bitcoin with this new equipment and hands over a portion of the profits to investors.
Victims Earn “Fake Profits”
Nevertheless, while there are several legitimate Bitcoin cloud mining services out there, the sector has sadly attracted scammers’ attention. Mining City seems to be one of these, with the SEC alleging that the company operates as a Ponzi scheme, paying out older customers with the gains from newer ones:
The plot used by Mining City undoubtedly indicates a Ponzi Scheme where funds from new investors are used in paying “fake profits” to prior investors and is designed mainly to favor its top recruiters and previous risk takers and is detrimental to subsequent members in case of scarcity of new investors.
The SEC has uncovered the scam perpetrators and has warned them and anyone who acts in their interests, with severe penalties. They investigate the fraud further, hoping to close it down before anyone else loses their investment.
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