SEC Investigates SeedIn Fraud Allegations with Special Audit

The Securities and Exchange Commission (SEC) has commenced a special audit into SeedIn Technology Inc. (SeedIn), following concerns over alleged fraud activities by its former president, Edison Tsai.

Licensed by the SEC, SeedIn has played a significant role in providing alternative funding solutions to small, medium, and emerging enterprises (SMEs) through its crowdfunding portal. Despite its success in amassing P1.42 billion for 296 projects as of December 2022, Edison’s purported misconduct has cast a pall over the company’s operations.

Kelvin Lee

SEC Commissioner Kelvin Lee conveyed the seriousness of the situation to The STAR, stating,

“MSRD is conducting a special audit of SeedIn which is intended to determine if there is any wrongdoing done and as needed, to also determine if we shall pursue enforcement actions.”

The exact figures involved in the audit are yet to be disclosed, reflecting the ongoing nature of the investigation.

In response to these allegations, SeedIn has initiated a forensic audit of its own to determine the full scope of the fraud and is preparing legal action against Edison. The company has committed to thorough investigations, stating,

“Rest assured that SeedIn is doing everything necessary to uncover the fraud committed by Mr. Tsai and to recover any amount which may have been misused by Mr. Tsai.”

The situation at Seedin highlights broader issues within the crowdfunding sector. Other SEC-registered platforms such as Investree Philippine and Eastern Securities Development Corp. (Round One) have also played a part in the capital raising success for over 200 businesses, with more than 1,000 issuers registered across these platforms.

Crowdfunding has proven beneficial for businesses like CrymtonComtech Sales & Services. However, the ongoing SeedIn investigation serves as a pertinent reminder of the need for stringent regulatory oversight and ethical conduct in the rapidly evolving crowdfunding industry, which has been recognised as a novel method for capital raising.