OneCoin, the infamous pseudo-digital currency has just been fined another EUR2.5 million by Italy’s Competition Authority for carrying out deceptive promotional campaigns in the country.
This is yet another hammer hitting OneCoin, a Ponzi scheme disguised as a cryptocurrency. OneCoin is owned by OneLife Network, a multi-level marketing organisation that sells marketing packages in replacement for OneCoin tokens.
Here is the background: Onecoin has been banned by Italy way back in February of this year for being a Ponzi scheme. The Italy’s Antitrust Agency said in a terse statement that:
After extending the company’s One Life Network Ltd. and Easy Life srl proceedings in relation to the promotion of criptomoneta OneCoin, ordered the precautionary suspension of the above activities by the One Life companies. Easy Life srl He has instead announced that it had proceeded to the interruption of the practice.
In fact, the information gained also the two professionals in question would be involved in the promotion of the purchase and distribution of criptomoneta OneCoin and packet-training related to it
On this point the Authority had in fact initiated proceedings against One Network Services Ltd. and three individuals in their capacity as registrants promotional sites onecoinsuedtirol.it, onecoinitaliaofficial.it, onecoinitalia.com. (Cfr. Communiqué of 30 December 2016) and arranged for them to suspend activities related to the promotion of that criptomoneta. In fact, the bulk of the revenues achieved the activity promoted by professionals derives not so much from the purchase of virtual currency OneCoin but rather by the payment of fees that consumers are requested to bear in the accession to the system, which in time to reach the goal of profit, appear to be required to recruit other consumers. These arrangements appear attributable to the typical dynamics of pyramid schemes.
In the collection of the elements that led to the extension of the procedure the subjective Agcm availed itself of the precious collaboration of the Special Unit of the Financial Police Antitrust.
The road ahead is getting tougher for owners of OneCoin. Many other countries have either issued a total ban on OneCoin or raised a fraud alert to its investing publics and consumers.
See the list of countries that have banned or issued fraud alerts on OneCoin:
The latest fine will be another major blow for the Bulgarian-originated Ponzi scheme. The authority did not mince words in its announcement of the fine when it said:
Pyramid sales and deceptive promotion: With these reasons, the Antitrust has imposed sanctions for € 2,595,000 at the OneCoin Criptomoneta.
The Competition Authority has determined that the modalities used by the One Life Network company with the help of other professionals to promote the purchase of virtual coin OneCoins and the training packages sold in conjunction with this were incorrect from the information provided To consumers about the characteristics of the product and its sales system with pyramid characteristics. Executions ceased in Italy following the suspension measures adopted by the Authority before the One network services and the registrants of the sites onecoinsuedtirol.it, onecoinitaliaofficial.it, onecoinitalia.com and then on the One life network, Easy Life .
The Authority re-established that currency promotion focused on a promise to the consumer: that after purchasing a training package, OneCoins (through a process of transforming the rough currency called mining) could obtain the OneCoins and subsequently Virtual coins would have increased their value by reason of their spread. “All the elements that were not found in the course of the proceedings. One Life’s business proposal was therefore based on the false prospect of huge profits: for example, the purchase of the 27,530 euro package would have allowed a counter value of three Million after only two years of joining the program. “
Pyramid sales were realized through the OneCoin diffusion mechanism: “Recruitment of new consumers was the exclusive purpose of the sales activity and was strongly encouraged by the recognition of various bonuses, the only effective and real remuneration of the program. In fact, the purchase of the training kit concealed the entry fee required to enter the system and convince other consumers of the goodness of the product. In fact, the OneCoin criptomoneta, which was not possible to verify existence and consistency, was the pretext for A system that was exclusively aimed at (and supported through) the inclusion of other consumers. “
In light of the “numerous evidence” collected by the Authority in conjunction with the Antitrust Nuclear of the Guardia di Finanza, the proceedings ended with sanctions against ONE LIFE NETWORK LTD (€ 2,000,000), ONE NETWORK SERVICES LTD ( € 500,000), Easy Life Srl (€ 80,000), as well as to the formal holders of sites onecoinsuedtirol.it, onecoinitaliaofficial.it, onecoinitalia.com. (€ 5,000 each).
This will further hamper the presence of OneCoin through its OneLife Network since OneCoin itself cannot be sold in the country to any investor.
Several other countries including Nigeria, Uganda, Turkey, India and many more jurisdiction have either raised a fraud alert on OneCoin or placed a total ban on the scheme within their borders. Germany’s top financial services regulator, BaFin has earlier this year issued a cease and desist order against OneCoin and its affiliates in the country.