Resolution no. 22573

Prohibition, pursuant to article 99, paragraph 1, letter c), of Legislative Decree no. 58/1998, of public offering of financial products represented by the "Investment Plans" called "Plan A", "Plan B", "Plan C", " Plan D", "Diamond Plan", "Silver Package" and "Gold Package" implemented by the so-called "Coin Earners Ltd" also through the website https://coinearnersltd.com

LA COMMISSIONE NAZIONALE PER LE SOCIETÀ E LA BORSA
[THE NATIONAL COMMISSION FOR COMPANIES AND THE STOCK EXCHANGE]

HAVING REGARD TO Law no. 216 of 7 June 1974 and subsequent amendments and supplements;

HAVING REGARD TO Legislative Decree no. 58 of 24 February 1998 and subsequent amendments and supplements (‘Consolidated Law on Finance’);

HAVING ESTABLISHED that, as a result of Consob’s supervisory activity, the presence was found on the web of the website https://coinearnersltd.com, the contents of which were also available in Italian;

HAVING ESTABLISHED that, through the website https://coinearnersltd.com, seven "investment plans" were promoted called "Plan A", "Plan B", "Plan C", "Plan D", "Plan Diamond", "Silver Package" and " Gold Package" that differed one from the other in the minimum and maximum deposit allowed as well as in the percentage of "gain" that they would ensure to subscribers and the frequency with which said "gain" would be paid to customers as indicated below:

- “Plan A”; “minimum deposit”: “$100”; “maximum deposit”: “$999”; “percentage of gain”: “45%” - “after 24 hours”;

- “Plan B”; “minimum deposit”: “$1000”; “maximum deposit”: “$2,499”; “percentage of gain”: “75%” - “after 48 hours”;

- “Plan C”; “minimum deposit”: “$2,500”; “maximum deposit”: “$4,999”; “percentage of gain”: “120%” - “after 72 hours”;

- “Plan D”; “minimum deposit”: “$5,000”; “maximum deposit”: “$24,999”; “percentage of gain”: “daily - 150% - after five o'clock”;

- “Diamond Plan”; “minimum deposit”: “$25,000”; “maximum deposit”: “$29,999”; “percentage of gain”: “daily - 200% - after 7 days”;

- “Silver Package”; “minimum deposit”: “$30,000”; “maximum deposit”: “$49,999”; “percentage of gain”: “daily - 450%”;

- “Gold Package”; “minimum deposit”: “$50,000”; “percentage of gain”: “daily - 800%”;

HAVING ESTABLISHED that the steps that each user was required to perform in order to subscribe to one or more "investment plans” were detailed on the website https://coinearnersltd.com . In particular, it was stated that the user would have to “open an account”, “access the member area”, “makean initial deposit”, “watch your capitalgrow […] without doing anything” and “ requestyour withdrawal”;

HAVING ESTABLISHED that, with regard to the activities allegedly carried out with the funds contributed by the subscribers of the " investment plans" and generating the earnings that would have been returned to the same subscribers, in the "Faq" section of the website https://coinearnersltd.com there were generic and fragmentary references to the unspecified use of capital (contributed by investors) in " cloud mining, which allows our company to earn Bitcoins without mining hardware, software, electricity or bandwidth ”; furthermore, the homepage stated that “ the company actively uses trading bots on digital currency stock markets, which is very cost effective and profitable ”;

HAVING ESTABLISHED that, after registering with the website in question through a procedure freely available also to Italian users, it was actually possible to access the personal area where the features dedicated to the purchase of one or more “investment plans" were available;

HAVING ESTABLISHED that through the website https://coinearnersltd.com the user was also offered the possibility of obtaining further earnings, by seeking additional users, according to a “referral plan";

HAVING ESTABLISHED that the so-called "Coin Earners Ltd", mentioned in https://coinearnersltd.com, has not answered the requests for information made by Consob and transmitted to the e-mail address found on the website https://coinearnersltd.com;

HAVING ESTABLISHED that the structure of the transaction is presented as an investment opportunity;

HAVING REGARD TO the fact that, according to the definition under Art. 1, para. 1, letter t) of Consolidated Law on Finance a " public offering [of financial products]" must be understood to mean " any invitation to offer or promotional message, in whatsoever form addressed to the public, whose objective is the sale or subscription of financial products including the allocation through authorised people ”;

WHEREAS the elements of the public offer relevant for the purposes of this provision can be summarised as follows:

a) the fact that the activity involves a specific or several specific “ financial products”, a category that includes - pursuant to article 1, paragraph 1, letter u), of the Consolidated Law on Finance, both the typified features of “financial instruments” and “ every other form of investment of a financial nature”;

b) the existence of a communication intended to persuade investors to purchase or subscribe to these financial products and a description in uniform and standardised terms of the main details thereof;

c) the fact that the offering in question is directed towards Italian residents;

HAVING ESTABLISHED that the subject of the contract proposal conveyed through the website https://coinearnersltd.com, represented by the described "investment plans", has such characteristics that it can be included in the list of financial products, sub-category "form of investment of a financial nature";

WHEREAS in fact, in this specific case, according to Consob's consolidated approach, the elements that qualify the notion of “ investment of a financial nature” are present, given the ascertained coexistence: (i) of an investment of capital; (ii) of a promise/expectation of return of a financial nature; (iii) of the assumption of a risk connected to the investment of capital;

WHEREAS the structure of the transaction requires that a) the participant uses their capital to subscribe to one or more “investment plans" among those indicated on the website https://coinearnersltd.com"; b) by virtue of the aforementioned subscription, investors are offered a variable return in relation to the "investment plan" subscribed by each user and deriving from the activities that the so-called "Coin Earners Ltd", based on the indications contained on the website https://coinearnersltd.com, carries out with the funds of the subscribers of the " investment plans" without the users themselves being required to perform any further activity; c) with consequent assumption of a risk related to using the entrusted capital;

HAVING ESTABLISHED, therefore, that the aforementioned return is allegedly paid for the use of the investor’s capital;

WHEREAS, consequently, the legal reason for the contracts offered via the website https://coinearnersltd.com can be deemed to be the production of a financial return as consideration for the use of capital paid-in by the recipient of such return, (who, therefore, contributes their own money with an expectation of profit, namely, an increase in the cash invested, “investment purpose”);

CONSIDERING, therefore, that, with regard to the existence of the requirement referred to under letter a), namely, that the offer in question may be classified as a “financial product”, the contract proposals offered, including through the https://coinearnersltd.com website appear to qualify as an “investment of a financial nature”;

HAVING ESTABLISHED that the above informative content on the website https://coinearnersltd.com provides a consistent representation of the features of the investment proposals, such as to place retail investors in a position to assess whether or not to join the initiative;

HAVING ESTABLISHED, therefore, that the requirement set out under letter b) is also met;

HAVING ESTABLISHED, moreover, that there are unequivocal elements about the fact that the offer in question is also aimed at the public resident in Italy, since the contents of the website https://coinearnersltd.com were available in Italian and, as part of the checks carried out on said website, the absence of mechanisms aimed at limiting or excluding registration to the same domain by users connected to the web from Italy/through Italian IP addresses was found;

HAVING ESTABLISHED that, with regard to the initiative in question, a complaint was also received from an Italian investor who claimed to have suffered financial losses in connection with the initiatives promoted on the website https://coinearnersltd.com;

HAVING ESTABLISHED that a sales scheme was also promoted through the aforementioned website which offered a user the possibility of earning additional money by recruiting further members of the initiative and that this scheme is suitable to also disseminate the offer of financial products among Italian investors;

HAVING ESTABLISHED, therefore, that the requirement set out in letter c) is also met, since the offer in question is aimed at the public resident in Italy;

HAVING ESTABLISHED, therefore, that the activity carried out by the so-called “Coin Earners Ltd” has the features of an offer of financial products to the public, as defined above;

HAVING REGARD TO article 94-bis of the Consolidated Law on Finance, paragraph 1, which establishes that “ parties who intend to make an offer to the public of financial products other than securities and shares or units of open UCITS must publish a prospectus in advance. To this end, an application must be submitted to Consob for approval, with the draft attached . The prospectus cannot be published until it has been approved by Consob pursuant to article 95, paragraph 1, letter b). [...]”.

HAVING ESTABLISHED that, in relation to the described activity, the prospectus intended for publication has not been sent to Consob;

HAVING likewise ESTABLISHED the non-existence of any of the exemptions - provided by the combined provisions of article 100 of the Consolidated Law on Finance and article 34-ter of Consob Regulation no. 11971/1999 (“Issuers’ Regulation”) - from enforcement of the rules on solicitation of public savings set forth by articles 93 bis et seq. of the Consolidated Law on Finance;

HAVING REGARD to resolution no. 22496 of 3 November 2022, whereby, pursuant to article 99, paragraph 1, letter b), of the Consolidated Law on Finance, Consob implemented the precautionary suspension measure, for a period of ninety days, of the offer to citizens residing in Italy involving an investment of a financial nature made also through the website https://coinearnersltd.com;

WHEREAS, the so called “Coin Earners Ltd” has sent no objections in response to the facts on which the suspension measure is based;

WHEREAS, therefore, in the light of the investigation outlined above and in the absence of any evidence to suggest a situation other than that outlined in the aforementioned suspension measure, the circumstances de facto and de jure established in the suspension measure are considered to have been ascertained;

CONSIDERING, therefore, that it has been ascertained that - according to the methods described above, noted at the time of adoption of the said suspension measure - an offer to the public has been made of products, sub-category “investment of a financial nature” in breach of the above law;

HAVING REGARD to art. 99, paragraph 1, letter c) of the Consolidated Law on Finance, pursuant to which Consob may “ prohibit the public offering if a violation is confirmed of the provisions of this Chapter or of the related implementation measures or if there are well-founded suspicions that such provisions or measures might be breached... ”;

RESOLVES:

It is forbidden to offer the public resident in Italy financial products represented by the "Investment Plans" called "Plan A", "Plan B", "Plan C", "Plan D", "Diamond Plan", "Silver Package" and " Gold Package" implemented by the so-called "Coin Earners Ltd" also through the website https://coinearnersltd.com

This Resolution shall be brought to the attention of the all the concerned parties and published in the Consob Bulletin.

This measure may be appealed before the Regional Administrative Court of Lazio within 60 days of the date of service.

1 February 2023

THE CHAIRMAN
Paolo Savona