Hungary activates massive crackdown on OneCoin

hungary

After raising several fraud alerts and warnings about OneCoin, Hungary is finally taking the bull by the horns.

The country has just initiated a massive crackdown and strategic plan to deal with the menace of OneCoin.

For starters, OneCoin is a Ponzi scheme perpetrated as a digital currency. OneCoin was founded by a Bulgarian called Ruja Ignatova.

In its latest action, Hungarian authorities said it has activated a task force that will tackle the spread and activities of OneCoin across Hungary. Interpreting a translated version of the statement, the task force was revealed to consist of key law enforcements and financial services regulators:

Several departments of the Ministry of the Interior, the Budapest Police Headquarters, the Chief Public Prosecutor’s Office, the General Prosecutor’s Office, the National Taxation and Customs Administration, The National Police Headquarters and the Joint Market Advisory Working Group of the National Bank of Hungary (MNB).

The rationale to carry out the clean up is because Hungary affirmed that:

The OneCoin construction, similar to the pyramid scheme, seems to be an investment in some kind of equipment, but in reality it can only be traded in a closed and unmanageable forum operated by the organizer. Simply put: for OneCoin currently no real commodity or service can be purchased, the value of the alleged virtual currency and its price is objectively unobservable. Promising high returns to the system, new entrants will be organized through the Internet by paying the commission of those who have previously joined (who have a strong financial interest in marketing and recruiting).

Apparently, Hungary has been on the case of OneCoin for a while. Last year, the country’s central bank issued a warning to its citizens that OneCoin investment should be shunned.

Over the past three and a half years, the central bank has written 9 occasions written warnings about the extraordinary consumer risks of virtual assets and systems (such as OneCoin and BitCoin) that can be used for each payment, and published the same warning of the European Banking Authority (EBA) too. In addition, the MNB continuously analyzes the necessary/potential steps in the case and, as it has done in the framework of the Market Surveillance Task Force set up for the effective, unified action against the misuse of money and capital markets in the fall of 2013, negotiates with these counterparties.

It clear that Hungary has joined the likes of Germany, India, Italy and Nigeria to put the record straight on what their views are on OneCoin. In the case of India, the country has carried out several arrest targeting promoters of OneCoin at seminars and other locations.

There are several countries who have banned and or issued fraud alert on OneCoin.

From the look of things, OneCoin owners and promoters continue to maintain their stand that they are operating an actual digital currency just like Bitcoin, Ethereum, Litecoin etc. However, they have not been able to convince and or prove that OneCoin has any similarity with these digital currencies.