OneCoin Promoters Fined €2.6 Million by Italian Consumer Watchdog

A consumer rights watchdog in Italy is fining a group of companies that have promoted OneCoin, the digital currency investment scheme widely believed to be fraudulent.

The 2.59 million euro fine was passed down by the Italian Antitrust Authority (IAA), quasi-autonomous non-governmental organization that is funded by the Ministry of Economic Development. It comes months after the group moved to suspend the operations of several OneCoin-affiliated companies in Italy.

The companies were sanctioned for utilizing pyramid scheme tactics and misleading investors through promotional materials and events.

The IAA said in a statement:

OneCoin's dissemination took place through a pyramid sales system as recruitment of new consumers was the sole purpose of sales activity and was strongly encouraged by the recognition of various bonuses, the only real and effective remuneration of the program. The purchase of the training kit in fact concealed the entry fee required to enter the system and convince other consumers of the goodness of the product."

Italy is the latest country in Europe to move to impose penalties against companies that promote OneCoin.

OneCoin, a purported digital currency, is sold via "packages" to investors who then redeem those packages for coins. Would-be investors are often encouraged to find others do buy those packages from them, adding fuel to the allegations that OneCoin is a Ponzi scheme.

Back in April, regulators in Germany effectively banned the scheme. Officials in Belize, India and Vietnam, among other countries, have taken steps against OneCoin in recent months.

Image via Shutterstock

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Italy Labels OneCoin a Ponzi Scheme, Levies €2.5 Million Fine

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Now fully exposed as a fraudulent pyramid scheme, Italian authorities have labeled OneCoin a Ponzi scheme and imposed a fine of  €2.5 million for the company to pay.

While Hungary and other countries have merely banned or taken OneCoin to court, Italy has stepped up and become one of the first countries to take a hardline stance against the company.

This seems to be the first instance where a government, in this case, Italy’s, acting through its Antitrust and Consumer Protection Authority (AGCM), has imposed a monetary punishment against the company that defrauded so many in the early days of cryptocurrency.

A History of Mistrust

OneCoin made a lot of waves early on as it posed as a digital currency, enticing many into its scheme with promises of huge returns. However, this has all unraveled spectacularly as their fraudulent ways have been outed in recent months.

In late 2016 OneCoin shut down its internal exchange, xCoinx, and it has remained closed, essentially stealing funds from those who invested in the Ponzi scheme.

This fraudulent and devious activity led to many countries stepping in to protect its citizens. Hungary, as mentioned previously, looked to take the company to court while German prosecutors also opened up criminal investigations.

Italy, through its AGCM, announced in December of last year that they, too, would be investigating OneCoin, ordering its affiliates to stop promoting the Ponzi scheme.

Italy Gives OneCoin the Boot

Since the investigation late last year, Italy’s ACGM has been busy as they banned OneCoin in the country in February of this year after wrapping things up, declaring the fake digital currency a “deceitful Ponzi scheme” according to regulators.

OneCoin dismissed the findings and even tried to deny having ever promoted their scheme in Italy, but they were officially banned in Italy at the end of February, and they were given 10 days to detail a plan as to how they would stop promotion within the country’s borders.

When no response was forthcoming, the AGCM warned OneCoin that they could face a fine of between €10,000 to €5 million for failing to comply. It was unclear if they responded to the warning, but as of August 10 of this year, the ACGM levied a  €2.5 million fine against OneCoin, in a groundbreaking move against the fraudulent Ponzi scheme.

In a cease and desist order issued to local affiliates, the AGCM stated:

The evidence gathered so far shows that the representation of the advantages in OneCoin, as well as being extremely random, are designed to attract and sign up a large number of consumers, who are required to provide significant economic investment.

This resembles a pyramid sales system which is prohibited by law.

The Final Nail in the Coffin

OneCoin has been publicly outed as a fraudulent company for some time now, but as more and more agencies and governmental players step up to take legal action against them, the death knell rings louder and louder still.

With current affiliates unable to convert their OneCoin Ponzi points balances into cash and several top leaders bailing, affiliate recruitment has slumped to all time lows.

Have you had any dealings with OneCoin? Is there a fear that other companies could follow this method of Ponzi schemes within the digital currency realm? Let us know your thoughts below!

Images courtesy of AdobeStock, AGCM.it

The post Italy Labels OneCoin a Ponzi Scheme, Levies €2.5 Million Fine appeared first on Bitcoinist.com.

OneCoin Fined 2.5 Million Euros by Italy Competition Authority

It has been some time since we last heard from OneCoin. The notorious Ponzi scheme is under investigation in several countries including Italy and the United Kingdom. The One Life Network, the company behind OneCoin, has now been fined 2.5 million euros for its misleading promotional campaigns. Slowly but surely, the end is approaching for OneCoin.

Governments are not taking kindly to OneCoin. The investment promises its users the stars and the moon if they invest in this program. Investors will not be required to do anything in return for said riches (although recruiting new users is always appreciated and rewarded). According to advertisements running across Italy, investing 27,530 EUR would result in a three million euro payday after two years. It is an appealing but entirely fake offer.

Such false advertising attracted the attention of Italy’s Competition Authority a few months ago. After the organization announced an official investigation regarding this Ponzi scheme, nothing was heard from it for a while. That situation has now changed. The Authority has taken a closer look at OneCoin and the One Life Network, and found its virtual money and training packages to be not entirely transparent. In fact, according to the investigating body, some of the information is outright misleading.

According to the Authority, OneCoin displays myriad “pyramid scheme characteristics.” Users of the scheme have been uttering similar sentiments for quite some time now. The investigative body also seized several OneCoin-related domains registered with Italian service providers. They include the OneCoinItalia and OneCoinItaliaOfficial domain names. It is good to see these getting shut down by government officials.

One of the main reasons why the Competition Authority is not too keen on OneCoin is the latter’s creation of virtual tokens. According to the website, it owns a blockchain system capable of mining OneCoins. These coins are then sold to new users, effectively driving up the value of every coin in circulation. However, users cannot use these coins beyond the One Life Network itself, let alone withdraw them to a private wallet. 

The Italian investigation revealed that none of those claims could be validated at this time. This confirms that there is no blockchain, mining, or even digital currency involved in OneCoin. Instead, users are paid on the basis of recruiting high-profit prospects by ensuring other people will purchase OneCoin packages in the future. That is, of course, a classic Ponzi scheme structure.  Programs like these deserve to be punished, since they will cause lot of unsuspecting people to lose their hard-earned money.

With a 2.595 million EUR fine now due, things are looking rather bleak for OneCoin right now. The company has yet to issue a response regarding these findings. It appears the One Life Network itself must cough up 2 million euros, and the related One Network Services another half a million. Other companies mentioned include Easy Life Srl, OneCoinItalia, OneCoinitaliaOfficial, and OneCoinsuedTirol. A lot of money will need to change hands, although it is highly doubtful that the One Life Network will cough up the funds without a fight. We eagerly await an official statement from the OneCoin team regarding this decision.