OneCoin investment warning issued by Bank of Hungary
OneCoin have been making all sorts of announcements to their affiliates over the last few weeks, with their efforts not going unnoticed by regulators.
Hungary appear to be the first country to have investigated the scheme, concluding that a public warning needed to be issued.
In the investment warning, dated June 10th, the Bank of Hungary identifies OneCoin’ as a “virtual pyramid scheme”:
New trading platforms, similar to Bitcoin virtual currencies – such as OneCoin – combine investment and trade, thus making it theoretically possible to market to prospective investors.
In reality however, the virtual marketplace of the pyramid is maintained by the owner under exclusive jurisdiction, and can only be traded through via a closed “stock market”.
OneCoin have tried to create the illusion that their OneCoin Ponzi points will be traded by the general public, but as of yet only OneCoin affiliates (investors) are the only ones interested in the cryptocurrency.
And they’re only interested in it because of the attached Ponzi points business model OneCoin uses.
Specifically pertaining to OneCoin’s compensation plan, the Bank of Hungary conclude the same:
(OneCoin) promises existing investors high yields by recruiting by new participants. As they join early investors receive commission payments and the commission payout is increased.
Should new investment slow down or dry up completely, the scheme collapses.
The investment in such companies involves special risks, since these assets are not included in the regulatory framework and are typically outside the National Bank of Hungary (NBH) and the European Union’s supervisory jurisdiction.
In the event OneCoin collapses, investors are not protected by the National Deposit Insurance Fund nor the Investor Protection Fund.
The Bank of Hungary has repeatedly warned consumers that before investing, verify that the service provider has the correct permissions monitoring.
OneCoin of course does not have the required permissions.
Looking forward, OneCoin investors have recently began advertising a US launch on July 4th.
July the 4th of course is a public holiday in the US, with further details of the purported launch yet to emerge.
Should OneCoin formally enter the US and set up operations however, one imagines it won’t be long before the scheme pops up on the SEC’s regulatory radar.