Top Cryptocurrencies

OneCoin: Why it caught the attention of regulators around the world

What is OneCoin?

OneCoin was one coin that attracted the attention of financial and law enforcement authorities around the world. The purported cryptocurrency was largely viewed as a pyramid scheme which governments globally asked their citizenry to clear away from.

The coin claimed to be like any other cryptocurrency and could be mined with a total supply of 120 billion coins available on its network. However, it became referred to as a scam by many governments and individuals with some calling OneCoin a Multi-Level Marketing (MLM) Scheme.

Why were regulators so much concerned about the ScamCoin?

 But why exactly was it viewed as the most sophisticated scam ever? Well, some of the reasons were how it interacted with those who bought the coin and again how it controlled where and when the coin was traded.

Concerning trading, the issuers of OneCoin even had their own ‘exchange’ where you could convert your OneCoins to only their euro equivalent.

For context,

Its promoters said the coin provided a way to get “filthy rich” and “the earlier you join, the more you make.”

To be part of the OneCoin family

“Your joining fee – ranging from a £100 Starter Package to £28,000 for a Special Combo Package – does not buy OneCoins themselves. Instead, it just buys you tokens. The idea is that these can later be exchanged or ‘mined’ to get OneCoins. Some deals involve so-called splits which double your stash of tokens.”

Image result for onecoin

Also, members of the OneCoin family were also encouraged with referral rewards where they had to bring new members on board in order to earn free OneCoins. This on its self made OneCoin fit into a Multi-Level Marketing scheme.

Am here to make you ‘filthy rich’

OneCoin promoters located in different parts of the globe continued to indicate how easy it was to get rich with OneCoin.

For example, Kari Wahlross, a OneCoin ambassador who was entrusted with showing Europeans the way to riches, was quoted in 2016 saying:

Do you know why I wear shades? Because the future looks so bright [with OneCoin]. I am here to make you filthy rich.

onecoin

Another reason OneCoin was seen as a scam from the onset is that, in 2016, its promoters claimed that its only competitor on CoinMarketCap was Bitcoin. But as it turned out, its only competitor was itself since it was not even listed on CoinMarketCap.

Turning to its website, in 2016, something was outrightly amiss. Somewhere at the bottom, it stated:

The company does not warrant that product descriptions or other content is accurate, complete, reliable, current, or error-free. The company reserves the right to, any given time, change the OneCoin compensation plan.

To try and lighten up the OneCoin path that was quickly turning dark, news broke out on fools day in 2017 indicating that a Federal Circuit Court judge in California, Manuel Lin Miranda, cleared OneCoin of any wrongdoing giving it a green light to be listed on CoinMarketCap. A closer look revealed that Miranda, instead of a judge, is an actor.

The Ugandan central bank, Hungarian central bank, Belgian, and authorities in the U.K were among those who warned against investing or being involved with OneCoin.

6 countries among those that could not withstand the OneCoin

OneCoin news from India

In April 2017, police in India started a crackdown on anyone who was involved with OneCoin. They even arrested 18 people while carrying out a seminar in the city of Mumbai.

Even though their mission was only eighteen months old at the time of the arrest, they had attracted investments from approximately 72 investors who together had parted with close to 100,000 U.S dollars.

Image result for onecoin

Police in India also mentioned that once an investor transferred money into OneCoin’s account, they were supposed to wait for 3-4 years for the coin to appreciate and make them billionaires.

According to one police commissioner;

The minute people put money into their accounts, they would see a coin against their name in the software. The accused told investors the value of the coin would increase in the next three to four years and they could become billionaires.

After interrogating some of the arrested supporters of the coin, it was uncovered that 4 banks located in New Delhi, India’scapital and Rajasthan, an Eastern Indian state were also involved in the scam. From one of the banks in Delhi alone, over $2.5 million was seized.

OneCoin news from Vietnam

In June 2017, in Vietnam, although the case was similar to all other places, OneCoin promoters made the deal even sweeter by forging a regulatory compliance license including all the necessary signatures.

OneCoin operators reportedly showed fake documents claiming to have been awarded a license with a seal approval from the Department of Management.

Their forgery was, however, shortlived. After the document went around social media, the country’s authorities were quick to give an official response stating the document was a forgery

OneCoin news from Finland

In August 2017, law enforcement agencies in Finland officially opened an investigation into the operation of OneCoin in the country. Finland had in 2015 warned against investing in OneCoin.

The Finish National Bureau of Investigation started looking into the case after it received numerous alerts from its citizens. After their investigations, the country’s authorities could not even determine if the organization even had a cryptocurrency after over 20,000 Finns had invested tens of millions of euros into OneCoin.

OneCoin news from Portugal

In December 2017, Banco de Portugal, the central bank of Portugal, indicated to the public that OneCoin is a scam.

In Portugal, OneCoin was being sold by OneCoin Limited, OneCoin Network Limited, and One Network Services Ltd, all of which the country’s central bank said were not authorized to conduct any financial activities in the country.

According to Portuguese law, only companies authorized by the Central bank are allowed to “accept deposits or other repayable funds” nationally.

OneCoin news from Bulgaria

In late January 2018, Bulgarian regulators disclosed that they are working with regulators law enforcement around the world to stop the operations of OneCoin. Regulators working with Bulgarian authorities included Europol.

This involved the authorities questioning of 2 Bulgarians who are also in possession of a German citizenship plus 14 others who were also interrogated in relation to the matter. Also, about 50 witnesses were were questioned.

onecoin

Lastly, in May 2018, prosecutors in China charged four promoters of OneCoin which was a culmination of two years of investigations. Out of the 106 individuals who were being investigated by the Chinese authorities, only eight were not prosecuted. In China, OneCoin received more than two billion U.S dollars.

In conclusion

Although an April fools day stunt, ruled that OneCoin was genuine, evidence was painted all along indicating that investors were falling into a trap. However, their journey into the trap was catalyzed by their urge to get rich quicker and easier. Instead, they got poorer quicker and easier.

coinmag

Philip is an experienced blogger keen on staying updated with trends and news surrounding the blockchain and Bitcoin space. With several years of freelance experience in various industries, Philip brings his knowledge and experience into the crypto space.

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