Xian Coin ("XNC")

May 27, 2021 ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT SEC ADVISORY The Securities and Exchange Commission ("Commission") has received information that CHRISTIAN ALBERT GAZA ("Xian Gaza") , individuals and/or group of persons representing XIAN COIN ("XNC") are enticing the public to invest in its digital currency claiming that the holders of XNC will enjoy a high range of price stability and appreciation of value due to the fact that it is taking advantage of a single, centralized supply chain. It further claims that it is independently controlled by the virtual crypto currency bank of Xian Gaza with a limited global supply of 75 million XNCs. The term "digital currency," "digital asset" or "digital token" generally refers to an asset issued and/or transferred using distributed ledger or blockchain technology, including assets sometimes referred to as "cryptocurrencies," "virtual currencies" and "digital coins." Accordingly, a blockchain or distributed ledger is a peer-to-peer database, spread across a network of computers that records all transactions in a theoretically unchangeable, digitally recorded data packages. Blockchains typically employ a consensus mechanism to validate transactions, which among others aims to achieve an agreement on data value on the state of ledger. They are usually traded on a digital asset trading platforms in exchange for other digital assets or fiat currency. Some digital assets are "native tokens" which means that they are represented on their own blockchain, though other digital assets may also be represented on the same blockchain. Based on its website https://xianco.in/ Xian Coin or XNC is a centralized digital currency powered by the Etherium Blockchain that is exclusively traded by its coin holders. It is owned and issued by a virtual cryptocurrency bank where you can exchange your coins to Xian Coin, Colombian Peso, Mexican Peso, Brazilian Real, Peruvian Sol and Philippine Peso. It also states that the primary function of Xian Coin is to create a powerful, unregulated and untraceable financial payment system that will power transactions and businesses across geographical spheres. To avail of XNC Coins, the investor must do the following: 1. Download the MEW WALLET ethereum wallet app on Google Play Store and Apple Play Store; 2. Message your FIRST NAME and HOMETOWN to NYEAM VLOGS page ( www.facebook.com/NYEAMVLOGS ); 3. Go to XIAN GAZA Facebook group and wait for your FIRST NAME AND HOMETOWN to be posted in the comment section of XIAN COIN CHAT AUTHENTICATOR post; 4. Once you have seen your FIRST NAME AND HOMETOWN in the comment section of the XIAN CHAT AUTHENTICATOR post, you may now ask the page admin for the GCASH ACCOUNT or BANK ACCOUNT DETAILS on where you will transfer your funds, and inform the page admin how many coin you would like to buy; 5. Once you have transferred your funds via GCASH and BANK TRANSFER you can take screenshots as proof and send to the admin page; 6. Fill out the XIAN COIN INFO SHEET to be provided by the page admin and send together with 1 valid government issued ID; and 7. Go and join the official Facebook group that will be given to you by the admin page. Based on the foregoing, XIAN COIN or XNC partakes of the nature of securities in the form of investment contract due to its centralized nature and is therefore subject to the regulatory authority of this Commission. Under the Howey Test, 1 an investment contract exists when there is an investment of money in a common enterprise with a reasonable expectation of profits to be derived from the efforts of others. Hence, investment of money in XIAN COINS pooled by Xian Gaza, motivated by expectation of profits generated from their supposed price appreciation from the promotional efforts of Xian Gaza, constitute an investment contract. The US SEC in its investigative report in "The DAO" case, said that "securities law may apply to various activities, including distributed ledger technology, depending on particular facts and circumstances, without regard to the form of the organization or technology used to effectuate a particular offer or sale." Thus, the offering and selling of Xian Coins to the public without a permit or license is a violation of Section 8.1. of the Securities Regulation Code. The records of the Commission show that XIAN COIN is not registered with the Commission neither as a corporation nor as a partnership. Further, it is NOT AUTHORIZED to solicit investments from the public since it has not secured prior registration and/or license from the Commission as prescribed under Sections 8 and 28 of the Securities Regulation Code. Likewise, Xian Coin is not a registered Virtual Asset Service Provider (VASP) with the Bangko Sentral ng Pilipinas under Circular No. 1108, series of 2021 or the Guidelines for Virtual Asset Service Providers . In the same manner, those who invite or recruit other people to join or invest in this venture or offer investment contracts or securities to the public may be held criminally liable under Section 28 of the SRC penalized with a maximum fine of Five Million Pesos (P5,000,000.00) or imprisonment of Twenty One (21) years or both pursuant to Section 73 of the SRC ( SEC vs. Oudine Santos , G.R. No. 195542, 19 March 2014). Thus, the public is hereby WARNED that the scheme employed by XIAN COINS clearly shows indication of a possible Ponzi Scheme, where monies from new investors are used in paying "fake profits" to prior investors and is designed mainly to favor its top recruiters and prior risk takers and is detrimental to subsequent member in case of scarcity of new investors. Furthermore, RED FLAGS or warning signs abound in connection with this virtual asset project as follows: Unsavory reputation of Christian Albert Gaza or Xian Gaza, the self-proclaimed "Pambansang Scammer," who even boasted that the money from Xian Coins will bankroll his underground activities. Gaza has been the subject of a previous SEC Advisory for his Cristiano Alberto Real Estate Fund (CARE Fund). Promise of extravagant returns by Xian Gaza in his videos where he declares to be the sole issuer of Xian Coin, controls the value of thereof and claims that its value will go up. Unlike other digital assets which are decentralized and use consensus mechanism such as proof-of-work/proof-of-stake or mining and whose value is dependent on supply and demand, Xian Coin is centralized, pre-mined or generated and whose supply and purported value is controlled by Xian Gaza. Xian Coin has no white paper. A white paper is an important document which details its design and development, its evolution and how it will generate business. Thus, having no white paper makes the project dubious and ought to be treated with suspicion. Xian Coin has no working model. A working model will determine how the money of the investors will make returns. Xian Coin is heavily promoted by Gaza in his Facebook page posting the alleged total amount of investments per month from investors. Xian Coin is not registered and traded with recognized cryptocurrency exchanges and contrary to Gaza's claims, has no particular use cases. Xian Coin as stated is not a registered VASP with the BSP. Xian Coin has no permit to offer and sell securities. Accordingly, the public is advised NOT TO INVEST or STOP INVESTING in any scheme offered by any individuals/entities operating under XIAN COIN or such other entities engaged in similar activities or initial coin offerings and digital asset trading which are not compliant with the BSP and the Commission. Should you have any information regarding the operation of XIAN COIN, please send your report to the Enforcement and Investor Protection Department at [emailprotected] . For the guidance of the public. Pasay City, May 27, 2021. Footnotes 1. Securities and Exchange Commission vs. W. J. Howey , 328 U.S. 293.