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Italian authorities call OneCoin a Ponzi scheme, demanding €2.5 million fine

16 August 2017 21:00, UTC

When OneCoin turned out to be a fraud scheme, Hungary and some other countries just banned or sued OneCoin. Italy, however, punished this company by governmental means, Bitcoinist.com reports.

This country used its Antitrust and Consumer Protection Authority (AGCM) to impose the fine of €2.5 million, similar to how American authorities sometimes impose fines on various criminal organizations around the world. The regulators of the country called OneCoin a “deceitful Ponzi scheme”, ordered this company to withdraw all its activities beyond the state borders and warned that there will be fines. OneCoin, however, did not manage to perceive all seriousness of Italian authorities on this matter and failed to comply with these regulations. In the end, the company was fined with the aforementioned sum and was completely banned in Italy.

And, again, this is not just one state authority being paranoid: Hungary’s Central Bank and Indian authorities must, too, have some information on illegal activities of OneCoin. This would explain why Hungary took OneCoin into court and India arrested some people connected with this company’s activities. German prosecutors are very interested in this organization as well and opened an investigation of its business.

Why so much law enforcement attention, then? It appears OneCoin used to actively attract the vast sum investments with promises of even bigger sums in the future, just like any financial pyramid does. It posed as a cryptocurrency, but, according to the statement of the Central Bank of Hungary, had an unobservable price. Italy must have reached the same conclusion. In 2016, xCoinx, the internal exchange of OneCoin, was suddenly shut down and did not reopen since then, leaving many investors with empty wallets.

OneCoin, of course, lacked the transparency that Bitcoin and other real cryptocurrencies can offer. A good advice from all this story is to use cryptocurrencies that have a transparent structure, have years of successful circulation and which do not require to attract more new members to get more money.