Regulatory Disclosure & Important Information
- Last Updated: December 2, 2025
- Platform: XP2P® Circular Gifting Technology
- Operator: EARTHX® Corporation Ltd. / International Limited
- Last Updated: December 2, 2025
- Platform: XP2P® Circular Gifting Technology
- Operator: EARTHX® Corporation Ltd. / International Limited
Table of Contents
⚠️ CRITICAL UNDERSTANDING: READ BEFORE PARTICIPATING
What XP2P® is NOT:
- Experimental Technology: XP2P® is a novel, patent-pending peer-to-peer charitable gifting platform demonstrating Universal Basic Income concepts using blockchain technology
- Charitable Gifting Platform: All payments are irrevocable charitable gifts between participants
- Technology Demonstration: A proof-of-concept showing how algorithmic gift redistribution could support UBI-style outcomes
- Voluntary Participation: No purchase requirements, no sales obligations, no recruiting mandates
What XP2P® is NOT:
- NOT an Investment: #reviewsThis is not a security, investment contract, or financial product
- reviewsNOT Guaranteed Income:#reviews There are no promises, guarantees, or assurances of financial returns
- NOT a Job or Employment: This does not create employment or replace traditional income
- NOT a Pension or Retirement Plan: This is not a qualified retirement or pension program
- NOT FDIC Insured: Your contributions are not insured or protected by any government agency
THE BOTTOM LINE:
XP2P® is an experimental Charitable Gifting Technology operating in an evolving regulatory environment. Outcomes are uncertain. It is possible that most participants may receive less than they contribute, or nothing at all, or may lose their entire contribution. Do not participate with money you cannot afford to lose.
IMPORTANT NOTE:
Currently, the entire Membership contribution is a One-Time-Only $28 (USD) with Payment Gateway processing fees of approximately $1.50. Only $3 is applied to XP2P® Platform operational costs. The remaining $25 is entirely applied to Peer-to-Peer Gifting.
If you cannot afford to lose a mere $28, you probably actually need to give this Technology an opportunity to financially assist you.
We have priced the Enrollment cost at only $28 USD to enable virtually everyone in any (non-sanctioned) country to afford and benefit from the XP2P® Technology.
1. Regulatory Status & Legal Framework
1.1 Current Regulatory Classification
XP2P® operates as a peer-to-peer charitable gifting platform utilizing decentralized finance (DeFi) blockchain technology. We have structured the platform based on consultation with legal counsel specializing in crowdfunding and financial technology.
Key Point: XP2P® is NOT registered with:
- U.S. Securities and Exchange Commission (SEC)
- Financial Industry Regulatory Authority (FINRA)
- State securities regulators
- Commodity Futures Trading Commission (CFTC)
Why: We do not offer securities, investment products, commodities, or regulated financial services. We provide technology infrastructure for voluntary peer-to-peer charitable gift exchange
1.2 Legal Consultation & Structuring
EARTHX® Corporation has consulted with attorneys specializing in:
• Crowdfunding platforms and alternative finance
• Decentralized Finance (DeFi) and blockchain technology
• Financial technology (FinTech) regulatory compliance
• Securities law and consumer protection
Based on legal guidance, we structured XP2P® to operate as charitable gifting (not investment) using DeFi technology (reducing certain regulatory requirements) with comprehensive user disclosures and transparency mechanisms.
1.3 Ongoing Regulatory Monitoring
We actively monitor regulatory developments in:
• Cryptocurrency and DeFi regulation
• Crowdfunding and alternative finance platforms
• Consumer protection standards
• State and federal securities laws
Important: Regulations governing platforms like XP2P® are evolving. What is permissible today may change. We reserve the right to modify, suspend, or terminate the platform in response to regulatory developments
2. Securities Law Analysis (Howey Test)
2.1 What is the Howey Test?
The Howey Test (from SEC v. W.J. Howey Co., 328 U.S. 293, 1946) determines whether a
transaction constitutes an “investment contract” (security). An investment contract exists
when there is:
1. An investment of money
2. In a common enterprise
3. With an expectation of profits
4. Derived from the efforts of others
2.2 XP2P® Analysis Under Howey Test
Legal Position:
We believe XP2P® does not constitute a security because:
• We make no promises or guarantees of returns (element 3 weakened)
• Gifts are characterized as charitable donations, not investments
• Returns depend on algorithmic distribution, not managerial efforts (element 4 weakened)
• Platform operates via automated smart contracts, not promoter actions
• Extensive disclosures eliminate profit expectations
However: This is our interpretation. Regulatory authorities may disagree. We have not
obtained a formal no-action letter or SEC determination
3. Distinction from Pyramid/Ponzi Schemes
3.1 Understanding Pyramid/Ponzi Schemes
Pyramid Scheme (FTC Definition): A business model that recruits members via promise of payments for enrolling others, rather than supplying investments or sale of products.
Ponzi Scheme (SEC Definition): An investment fraud where returns to earlier investors are paid using capital from newer investors, rather than from profit earned.
3.2 How XP2P® Differs: Mathematical Analysis
| Characteristic | Pyramid/Ponzi Scheme | XP2P® Platform |
|---|---|---|
| Promises/Guarantees | Guaranteed returns promised | ✓ NO promises or guarantees. Uncertain outcomes disclosed. |
| Recruiting Requirement | Must recruit to earn | ✓ NO recruiting required. Optional invitation system. |
| Dependency on New Participants | 100% dependent on new recruits | ✓ 10-30% dependent. Auto-ReEntry creates 70-90% internal circulation. |
| Growth Requirement | Requires exponential growth | ✓ Can operate at steady-state. Scales down gracefully. |
| Sustainability | Mathematically guaranteed to collapse | ✓ Designed for long-term sustainability through internal circulation. |
| Transparency | Hidden mechanics, fake returns | ✓ Public data dashboard. Realtime statistics. Blockchain transparency. |
3.3 Auto-Re-Entry Technology: The Key Difference
XP2P® ‘s patent-pending Auto-Re-Entry mechanism fundamentally distinguishes it from traditional pyramid schemes:
How Auto-Re-Entry Works:
• When a participant receives a gift, a portion automatically re-enters them into the next cycle
• This creates internal circulation of gifts within the existing participant base
• The platform becomes less dependent on new participants over time
• At 70-90% re-entry rates, the platform requires minimal new participation to sustain.
Mathematical Impact:
• Pyramid Scheme: Requires constant 2x-5x growth in participants = collapses when growth stops
• XP2P®: Can operate at zero growth or even negative growth = sustainable through internal circulation, re-circulation
4. Comprehensive Risk Disclosure
4.1 Financial Risks
⚠️ YOU MAY LOSE ALL MONEY YOU CONTRIBUTE
This is the single most important risk to understand. XP2P® makes NO GUARANTEES.
Common scenarios where you may lose money:
• Platform Population Decline: If participants leave faster than new ones join, cycles may not complete.
Note: Participants’ leaving is unlikely, and the initial One-Time-Only $28 Gift is permanent, enabling systemic security and mitigating any risk. Furthermore, the Technology “Underwrites” the Platform to produce additional payout distribution security.
• Level Lock Expiration: If you don’t unlock levels in time, you forfeit that cycle’s potential gift
• Platform Termination: We may suspend or terminate the platform at any time
• Regulatory Shutdown: Regulators could order platform closure
• Technical Failure: Smart contract bugs, blockchain issues, or other technical problems
• Low Participation: If overall participation rates drop, completion rates decline
4.2 Regulatory Risks
• Evolving Regulations: Cryptocurrency and DeFi regulations are rapidly changing
• Potential Reclassification: Regulators could determine XP2P® requires securities registration
• State-by-State Variation: What’s permitted in one state may be prohibited in another
• International Restrictions: Some countries prohibit platforms like XP2P®
• Enforcement Actions: SEC, FTC, or state regulators could investigate or take action
4.3 Technical Risks
• Smart Contract Bugs: Code vulnerabilities could cause loss of funds
• Blockchain Network Issues: BSC or other networks could experience downtime
• Wallet Security: If you lose your private keys, you lose access to your funds
• Transaction Irreversibility: Crypto transactions cannot be reversed if sent incorrectly
• Cyber Attacks: Hacking, phishing, or other security breaches
5. Platform Transparency & Data
5.1 Our Transparency Commitments
Unlike traditional opaque systems, XP2P® provides unprecedented transparency:
Publicly Available Data:
• Real-Time Statistics: Current participant counts, cycle completions, gift distributions
• Historical Performance: Actual outcome data by level and timeframe
• Blockchain Records: All transactions verifiable on public blockchain
• Algorithm Documentation: Detailed explanation of how redistribution works
• Financial Flows: Aggregated data on money in vs. money out
Access: View our transparency dashboard at XP2P.io/transparency
(NOTICE: Data is currently unavailable due to the newness of the XP2P® Technology
Platform. Updates to this information category will be provided when acceptably
available.)
6. Tax Implications
⚠️ WE ARE NOT TAX ADVISORS
The following is general information only. Consult a qualified tax professional before participating in XP2P®
6.1 Potential Tax Treatment
Gifts received through XP2P® may have tax implications:
If Treated as Gifts:
• Generally, recipients don’t owe income tax on gifts received
• However, IRS limits may apply to gift tax exclusions
• Donors typically can’t deduct charitable gifts to individuals
If Treated as Income:
• Amounts received may be taxable as ordinary income
• You may receive Form 1099 reporting
• Estimated tax payments may be required
• Self-employment tax might apply in some cases
7. Frequently Asked Legal Questions
Q1: Is XP2P® legal?
XP2P® operates as a peer-to-peer charitable gifting platform using DeFi technology. We have consulted legal counsel and structured the platform to comply with applicable laws. However, this is innovative technology in an evolving regulatory environment. We make no guarantees regarding regulatory treatment. Legality may vary by jurisdiction.
Q2: Is this a Ponzi scheme or pyramid scheme?
No. Ponzi/pyramid schemes promise guaranteed returns from recruiting others. XP2P® makes no guarantees, requires no recruiting, and uses Auto-Re-Entry technology to create internal sustainability rather than depending entirely on new participants. See Section 3 above for detailed mathematical analysis of the differences.
Q3: Why isn't XP2P® registered with the SEC?
We do not believe XP2P® offers securities or investment contracts. Participants make charitable gifts with extensive disclosures that outcomes are uncertain. There are no promises, no guaranteed returns, and no ownership interests created. Therefore, securities registration is not required. However, regulatory authorities could disagree with this assessment.
Q4: Can regulators shut down XP2P®?
Yes. The SEC, FTC, state regulators, or other authorities could take action requiring platform modification or termination. This is why we emphasize: DO NOT participate with money you cannot afford to lose. We reserve the right to suspend or terminate the platform at any time, including in response to regulatory developments.
Q5: What happens if regulators contact XP2P?
We will cooperate fully with any regulatory inquiry. We maintain detailed records, transparency data, and compliance documentation. We will work in good faith to address any concerns raised. If compliance requires platform changes, we will implement them or cease operations rather than operate unlawfully.
8. Statement to Regulatory Authorities
This page serves as evidence of EARTHX® Corporation’s good faith efforts to operate
XP2P® transparently and responsibly. We have:
✓ Consulted legal counsel on platform structure
✓ Implemented extensive user disclosures
✓ Made no false promises or guarantees
✓ Published comprehensive risk warnings
✓ Provided complete transparency through data dashboard and blockchain records
✓ Developed actuarial models demonstrating sustainability
✓ Established compliance monitoring and marketing controls
✓ Committed to cooperation with regulatory inquiries
We recognize this is innovative technology in an evolving regulatory space. We welcome
regulatory guidance and are prepared to modify operations or cease if required by law.
For regulatory inquiries: Legal@EARTHXCorporation.io
9. Final Considerations Before Participating
Before you contribute to XP2P®, ensure you understand and accept:
1. Experimental Nature: This is unproven technology with limited operational history
2. Uncertain Outcomes: Most participants may receive less than contributed or nothing
3. Total Loss Possible: You may lose your entire contribution
4. No Guarantees: There are no promises of any kind
5. Regulatory Risk: Platform could be modified or shut down
6. Irreversible Gifts: No refunds or returns
7. Technical Risks: Smart contracts, crypto, and blockchain have inherent risks
8. Tax Implications: Consult tax advisor
9. Not a Replacement for Income: Do not rely on XP2P® for living expenses
10. Your Responsibility: You alone are responsible for participation decision
THE ULTIMATE QUESTION:
Can you afford to lose 100% of what you initially contribute ($28)?
If the answer is NO, do not participate in XP2P®.
If the answer is YES, proceed only after reading our complete Terms of Service and understanding all risks disclosed in this document.
Document Information
Last Updated: December 2, 2025
Version: 1.0
Operator: EARTHX® Corporation LLC / International Limited
Platform: XP2P® Circular Gifting Technology
Contact: Legal@EARTHXCorporation.io
Related Documents:
• Terms of Service
• Privacy Policy
• Transparency Dashboard
• Frequently Asked Questions
This disclosure is provided for informational and educational purposes. It does not constitute legal, financial, tax, or investment advice. Consult appropriate professionals before making any decisions regarding XP2P® participation.
