OneCoin cops 2.5 million euro pyramid scheme fine in Italy
The Italian Antitrust and Consumer Protection Authority has fined OneCoin 2.5 million euro for being a pyramid scheme.
Italy was one of the first countries to take a hard-line stance against the OneCoin Ponzi scheme.
In early December of last year, the AGCM announced an investigation into OneCoin and ordered local affiliates to stop promoting the company.
The regulator cited the reason behind the investigation was suspicion OneCoin was a “deceitful Ponzi scheme”.
On December 30th the AGCM issued an interim injunction against One Network Services, effectively banning the promotion of OneCoin in Italy.
AGCM’s investigation into OneCoin continued and finally wrapped up in late February.
Despite the ban, undercover raids on OneCoin recruitment events revealed promotion of the Ponzi scheme in Italy was still taking place.
OneCoin was given ten days to cease any and all promotion of the company in Italy.
They were also required to provide the AGCM with a detailed plan of measures taken to ensure OneCoin was not promoted in Italy.
As of March 7th, ten days after the February 27th ban, OneCoin had as of yet failed to reply to the AGCM.
This prompted the regulator to warn that continued non-compliance saw OneCoin risk fines of €10,000 to €5 million euro.
Whether OneCoin ultimately responded to the AGCM’s ban is unclear. On August 10th however the AGCM announced it was fining the company 2.5 million euros for running a pyramid scheme.
The AGCM identify OneCoin as a “pyramid sales system” that sold “onecoins” to the general public.
The regulator referred to claims OneCoin sold “training packages” as “incorrect”.
(OneCoin’s) promotional activity was centered on the promise that the consumer, after acquiring a training package, could obtain OneCoins (through a process of transforming the rough currency called mining) and that later those virtual coins would have increased their value.
OneLife’s business proposal was therefore based on a false, high-profit return: for example, the purchase of the €27,530 package would have allowed a value of €3,000,000 after just two years of joining the program.
Pyramid schemes in Italy are illegal as per the Consumer Code, which is used to regulate commercial practices.
Citing “numerous evidence” gathered in conjunction with the Antitrust Special Department of the Guardia di Finanza, the AGCM fined
- OneLife Network €2 million euros
- One Network Services €500,000 euros
- Easy Life SRL €80,000 euros and
- the owner(s) of two Italian OneCoin affiliate websites €5,000 euros each
OneCoin has yet to respond to the AGCM’s fine, which as far as I’m aware of is the first monetary penalty issued against the company.
With affiliates unable to convert their Onecoin Ponzi points balances into cash and several top leaders bailing, OneCoin affiliate recruitment has slumped (Alexa).
The company is currently focused on trying to revive investment activity through promotion events in Africa and Vietnam.
Update 8th March 2018 – Following an appeal, an Italian Administrative court has reversed AGCM’s suspension of OneCoin.
The new directive has been issued while AGCM continues to investigate.