Norwegian DSA warn against OneCoin pyramid scheme
Although not as large as its US counter-part, Norway’s Direct Selling Association (DSA) has 22 member companies.
The organization claims that around 75% of Norway’s 88,000 MLM affiliates belong to one or more of their members.
One of the stated objectives of the Norwegian DSA is to ‘protect consumers’ legitimate interests with respect to direct sales companies‘.
And that brings us to OneCoin…
In a March 3rd article titled “(We) don’t want to be the police”, the Norwegian DSA called OneCoin out for being an “ugly” pyramid scheme.
According to the DSA, their alarm bells go off every time they read a headline like “Pyramid scheme promises millions in returns”.
Says Jan-Fredrik Torgersen, leader and Chairman of the DSA;
The company OneCoin is a good, but ugly example (of this).
According to the DSA, OneCoin is marketed in Norway as an investment scheme. An “enormous” ROI of about 18,000% is cited in OneCoin promotional material, along with claims OneCoin can be used like a bank account that pays 13% interest.
Raw numbers wise, OneCoin ‘ask(s) people to invest 1,200 NOK ($141 USD), to earn 24,000 NOK ($2820 USD)‘.
Or those with (a) XL wallet to invest 338,000 NOK ($39,727 USD) to be left with a profit of 62 million NOK ($7.2 million USD).
Welcome to a fantasy world full of fraud!
To illustrate just how disconnected OneCoin’s business model is from their pseudo-compliance manta of selling “education packages”, the DSA cite a report from Finansavisen journalist, Steinra Grini.
Grini approached Norwegian OneCoin promoters at the Vågsentret shopping mall in Ytre Enebakk.
While claiming to be the new BitCoin, they instead concentrated on selling so-called “Tokens”… which multiply themselves with express speed when they frequently split, which means that the number of tokens doubles (company-wide) without a drop in value.
This, the Norwegian DSA claim, is evidence of pyramid scheme fraud.
Interestingly enough and despite OneCoin’s MLM-based business model, the DSA differentiate OneCoin from MLM.
This has nothing to do with our business, but still we need to take an active role, and warn against this.
Not because debunking fraud is a part of our business – but because we have seen people tend to generalize, and put all (MLM) sales outside regular shops (and) in(to) one category.
That category in this specific instance is pyramid scheme fraud, which the DSA have taken it upon themselves to warn consumers about.
Unfortunately there is a chance that fraud and serious business are mixed up.
We can’t just sit still and watch, says the DSA’s leader Jan-Fredrik Torgersen.
Total projected losses in OneCoin are at this stage hard to predict, however there appears to be no shortage of reports of affiliates having invested 40,000 and 50,000 NOK into the scheme ($4701 and $5876 USD).
Some of them have received bonuses of 36,000 NOK in so-called Tokens.
But if you choose to sell these tokens, you will be moved to the bottom and have to build it up again from scratch, the source says.
By trapping affiliate funds in OneCoin, top investors are able to withdraw the funds. By the time a significant number of investors are ready to start making regular withdrawals, there’s no money left.
There is little information available about OneCoin besides invitation to promotional meetings.
There you will hear claims that the concept is legal in 200 countries.
Depending on how much you have invested, you will be able to earn money from up to four levels below yourself in the pyramid, and up to 25 per cent of the money circulating.
With respect to companies like OneCoin putting legitimate MLM at risk, I totally agree with the DSA. People invest in these scams, get burnt and forever more their impression of the MLM industry is tarnished.
Not to mention the copious amounts of negative mainstream press that’s generated each time larger MLM Ponzi schemes like OneCoin collapse or are shut down by regulators.
Internally, it’s great to see Norway’s DSA making public announcements about obvious Ponzi scams. As the US DSA continues to lose members due to perceived inaction and policing of their own members, the contrast couldn’t be greater.