OneCoin steal almost $200,000 from affiliate
Imagine you had hundreds of thousands of dollars in a cryptocurrency.
After a month of trying to resolve issues converting the cryptocurrency into money you could actually use, you then raised the issue in public.
Next thing you know your entire balance is gone and you’ve been banned from acquiring the digital coin.
Does this sound like a legitimate cryptocurrency offering to you?
Chris Stone joined OneCoin back in August of 2014, after he was prospected by Master Distributor Juha Parhiala through Facebook.
After meeting on Facebook I agreed to meet up with him for a beer to find out about this “Business Opportunity” he was talking about on Facebook.
Stone was signed up to OneCoin directly under “JS5876”, a Master Distributor account shared by Parhiala and Sebastian Greenwood.
Stone claims Parhiala and Greenwood have multiple OneCoin Master Distributor accounts.
Upon signing up as a OneCoin affiliate, Stone invested €530 in a Trader Package, and began accumulating OneCoins. He later paid another 5000 EUR for a Tycoon Trader account.
As per OneCoin’s website:
(The Tycoon) package is for those who want to seriously profit from mining and trading OneCoins.
Over the next year Stone grew his OneCoin account, recruiting other affiliates and building his downline along the way.
From time to time he made small withdrawal requests, which were processed within 1 to 3 days.
Then about a month ago, all that changed.
Starting September 7th, five withdrawal requests totaling €2138 EUR remained frozen on the status “requested payout processed”:
735 EUR Withdraw 07-09-2015 11:07:21 Requested payout processed
527 EUR Withdraw 07-09-2015 15:22:11 Requested payout processed
252 EUR Withdraw 11-09-2015 08:38:27 Requested payout processed
374.2 EUR Withdraw 15-09-2015 17:36:07 Requested payout processed
250.52 EUR Withdraw 21-09-2015 11:23:43 Requested payout processed
After 30 plus emails to OneCoin support and their refusal to supply him with a wire transfer tracking code, a frustrated Stone took to OneCoin’s Facebook page:
Still never received wired money from last Thursday from the 2 wire transfers that left my account.
The other 4 guys have not received pay also.
The other 4 wires have not left my account yet and two of them are even over 10 days passed due.
Support has not stated why the money transfers have not arrived in the accounts they were sent to.
Even though prior wires to those accounts would arrive within a day from showing out of the OneCoin account.
When will members actually receive the money that they were suppose too?
Is OneCoin actually out of money and actually not going to pay the members what is owed or what they said they already wired from the accounts?
The question sparked discussion among affiliates, with others complaining OneCoin wasn’t paying them either.
Eventually Juha Parhiala himself weighed in, explaining why Stone had not been paid:
Chris, you can’t just grab money away from he company without doing anything.
You gotta recommend two tycoons or one premium package to qualify for your withdrawal.
That investors were required to recruit new investors into the scheme had not been previously disclosed by OneCoin.
Less than twenty-four hours later, OneCoin deleted the entire discussion from their Facebook page and froze Stone’s affiliate account:
Dear Christopher Stone,
This email is to inform you that due to violation of the OneCoin Terms and Conditions, your account: ChrisStone has been frozen.
I am copying the Head of the legal department Irina Dilkinska, in case you have questions about the specific violation.
Please provide an account number, which we can use to refund the payment for the Tycoon package.
Thank you in advance.
The OneCoin Support Team
Stone didn’t fraudulently obtain OneCoins and he didn’t hack anybody’s account – all he did was ask why he hadn’t been paid for nearly a month.
At the time of the account being frozen, Stone’s OneCoin account held 71,735 OneCoins.
As per the exchange rate listed on xCoinx, the current purported market value of OneCoin is $2.73.
I say purported, because xCoinx is an exchange set up by OneCoin after no legitimate third-party exchange would list their coin.
Nonetheless, that is the advertised exchange rate OneCoin lead their affiliates to believe their coins are worth. And this means the OneCoins in Stone’s backoffice hold a market value of $195,836.
The outstanding €2138 EUR ($2600 USD) in withdrawals brings this amount to $198,436.
And all OneCoin are offering Stone is a refund on his initial €5000 EUR ($5608 USD) investment.
What OneCoin have done with the outstanding $192,828 worth of OneCoins in Stone’s backoffice is a mystery. But if you’re wondering how OneCoin are able to access a private individuals OneCoin balance, that’s because OneCoin doesn’t function like a cryptocurrency.
As per an October 30th, 2014 email to Stone from Ruja Ignatova, Founder and owner of OneCoin:
In terms of security OneCoin is extremely secure – and coins and tokens cannot disappear – as they could with BitCoin.
The reasons are 3:
- We have a centralized database with our client’s e-wallets and accounts. We back up this database several times per hour. BitCoin do not have a database like this, and who ever gets your “keys” can hack and steal your coins. We however can track all transactions and even a crash will not make coins disappear, as we back up very frequently.
- 2. Coins do not leave the e-wallets currently, they are transferred in the system. If a member hacks your account – we can track immediately who did what and how and restore your balance.
- Last but not least before money leaves the system, there are different checks to be made. So if someone “steals” your money, again he has to provide a bank account or other form of identification.
Points 1 and 3 are neither here, but point 2 clearly differentiates OneCoin from an otherwise legitimate cryptocurrency.
The OneCoins in an affiliate’s backoffice are infact just points, which the company can shuffle around as they see fit – without authorization or permission from account holders.
What effect this has one OneCoins purportedly audited blockchain is unclear.
This does mean that they might be able to restore a OneCoin point balance should the system get hacked, but it also means they can seize OneCoins in an affiliate’s account at any given time.
Unfortunately for Chris Stone, it was because he dared to ask why he hadn’t been paid in a month.
Other than Juha Parhiala’s statement that Stone failed to recruit enough new OneCoin investors to qualify for withdrawals, to date OneCoin have failed to explain why Stone was not paid.
Meanwhile OneCoin insist they are a legitimate cryptocurrency, and continue to solicit new investment from affiliates on that premise.
This despite decentralization and nobody being able to seize funds in an account, being the two major benefits of cryptocurrency offerings.