OneCoin a criminal organization, claims Kazakhstan regulator
Back in April Kazakhstan authorities arrested top OneCoin investor Mirsaitova D.K. and several of her local downline.
The case is being handled by the Economic Investigation Service, a department of the State Revenue Committee.
In response to a media enquiry, yesterday the SRC provided an update as to the current status of the case.
Following their arrest, Mirsaitova D.K., his son Mirsaitovym SD and Smagulova TH and Tambetovoy GK are under house arrest.
They are charged with committing fraud by breach of trust and enriching themselves via organized crime on behalf of OneCoin.
The SRC claim Mirsaitova D.K. and his OneCoin downline ‘raised funds from investors under the pretext of the implementation of a cryptocurrency bearing the same name‘.
OneCoin is identified as a “Bulgarian company”.
As per OneCoin’s business model, the company solicits investment into tokens, which are then exchanged for OneCoin points.
OneCoin arbitrarily increase the value of points. Affiliates put in withdrawal requests on the adjusted value and are paid a ROI out of subsequently invested funds.
Based on this business model, the SRC claim
OneCoin is not actually a cryptocurrency and is instead electronic payment units, which are widely used in online money games.
All of the information told to investors regarding the possibility of obtaining super-profits is criminal fiction, with the aim of misappropriating investor funds.
The SRC’s pre-trial investigation tracked funds invested into OneCoin locally since 2015.
The regulator has pegged OneCoin investor losses in Kazakhstan at 2.2 billion KZT ($6.7 million USD), 391 million KZT ($1.2 million USD) of which has been traced to “foreign company” bank accounts.
Despite regulatory investigations across Europe and arrests in several countries, Bulgarian authorities have yet to take any action against OneCoin.
I’m sure all the major pimps of OC will say this is just more fake news from haters, or will claim once Ruja shows up the charges will be dropped once she explains how OC really works and it is not a criminal enterprise.
Usually the story is that the OneCoin Ltd. has done nothing wrong, they are just selling education. The local IMAs were making promises against company policy. (“Just education”, right… 😀 )
However, that was the answer for Italy ban of operations.
That was the answer to India arrests.
That was (to some extent) the answer for Germany BaFin cease-and-desist. (Since first statement did not name OneCoin Ltd., only German company International Marketing Services GmbH, inherited from Unaico/Sitetalk/IMS scam OneCoin bought over a year ago.)
Of course when BaFin also named OneCoin Ltd., there has been zero news on the subject of German ban.
OneCoin Ltd. based in Dubai will face soon some problems based on the Emirates Goverment 🙂
Someone should ask Ruja why there is a need for this coins if they sell “just education”, but the more interesting question would be why she herself likes to talk about the value of her coin.
Here is the “cryptoqueen” in January, 2016:
Yesterday, billions were lost in in Bitcoin and Many Alt Coins.
Why was not One Coin affected?? Here is a clue. Its Fake.
Jamie Redman (Buyer Beware!) up with an article. Recent occurrences about Onecoin.
Nice discussion with Bjorn Bjercke…
“Onecoin Operators Get In Trouble Again In Three More Countries”
Hahaa. The new Bitcoinlover: NAVID TAVAKOLI! An other one who doesnt want to answer questions about OC.
What about Happy Mondays, Tavakoli?You former Lap Dog of Ruja.
Please spread it on twitter, guys.
Cant stop the no-brakes shitcoin truck!
Onecoin just got named as one of 26 bogus cryptocurrency scams Chinese citizens should watch out by People’s Daily:
Chinese link and translation coming.
Thanks Kasey, will do a writeup after (I did not “Vicat credits” didn’t appear in the article?).
Would love to see the list… Too many bitcoin scams going around, of course would need to see it in English format.
This could be pretty big, as well. Onecoin black diamond, Jose Gordo, in a letter published in “Metro Ecuador, apparently rebutting article concerning Onecoin and BeCoin scams, affirms that OneLie Network is “totally legal in Colombia (and Ecuador).
Awkwardly, according to Google translation (and assisted by my own comprehension of Spanish), he seems to separate “Onecoin” with “OneLife Network,” almost to the effect of saying that the two have (nothing?) to do with one another…
…this is a MUST properly translate article, as there is an image of a letter written and allegedly signed by Gordo, who is known as Latin America Brand Ambassador!
I’ll leave further analysis to the professional.
Contrary to House Gordo’s claims, Columbia issued a statement that using bitcoin (assumedly “cryptocurrency” and/ or pseudo-cryptocurrencies) to carry out pyramid schemes can result in a sentence of up to 20 years in prison for both leaders and IMA’s, alike.
TC NOTE: while the word “bitcoin” is used, the emphasis seems to clearly be focused on illegal pyramid schemes, recruitment thereof and promises of large returns- which no one can predict.
Rough translation follows:
Decrypting the Pyramid selling cryptocurrency scam: doing a runner when it’s time to turn a profit and pay people back
Reposted from Beijing Youth News
In recent years, Bitcoin fever had put cryptocurrency into people’s vocabulary, and scammers are using this new concept to cook up more and more scams. Recently, People’s Bank of China made an announcement that addressed many such scams claimed to be approved by People’s Bank, which is utter nonsense.
People’s Bank stated clearly, “PBC has not drafted any regulations on cryptocurrency, nor did it authorize any agency or company to launch such cryptocurrency. Any so called digital currency (or cryptocurrency) are NOT legal tender. Some of these so called digital currency launched by organizations or companies, and claims that involve PBC in such currencies, may possibly involve pyramid sellign and fraud. The public should be aware of such risks, and only invest after understanding all the risks.
As a coincidence, recently, JiansuNet’s Finance Forum had just revised it’s “Guide to popular online scams and pyramid selling schemes” to 2017 edition, and it added two new categories: cryptocurrency pyramid selling and SMS / Wechant pyramid selling. Under the cruptocurrency section, it stated that one needs certain amount of technical knowledge to understand cryptocurrency, which most people lacks. Many pyramid sellers (read: scammers) exploit this knowledge gap by marrying cryptocurrency with pyramid selling, essentially creating “klepto-currency” (lit: pyramid selling cryptocurrency)
The guide pointed out 26 different so-called cryptocurrecies that seem to be engaged in pyramid selling They include: GemCoin (busted in US), Beichuan Coin (appears to be China only, collapsed), SMI, MBI (we knew what happened this one), OctaCoin (aka Nano?), DarkCoin, MMM (duh), JUNFUDA (Chinese name sounds like US Fidelity, dead), K-Coin (invest in a Thai canal?!), VPAL, OneCoin, Huaqiang Coin (dead), DirCoin (?), AsiaInvest CB International Group CB Coin (closed), “BiSen” (Crypto exchagen arbitrage?), JPM Coin (stole JP Morgan’s name), BETACoin, WCoin, UToken (we knew), jubaoCoin, FoxCoin (linked to 20th Century Fox), Wanxi888 Investment (French, yeah right), Wanfu Coin (organizer is in the US but scammed millions in China), WuXingCoin (reboot of ShuMaoWang Cloud Commerce Net scam in Thailand and Malaysia), EzMoney (Malaysia?), ChinaCoin (bogus claim to be backed by Chinese government).
How does a kleptocoin scam work
Insiders explained that the issuer controls all aspects of the currency, including all aspects of trade. To suck in more investors, they will periodically raise prices and “limit” supply to manipulate the market. When it’s high enough, they’ll launch backroom deals to sell off their stash and the price will crash. Or perhaps the entire trading platform goes offline and leadership goes into hiding, and relaunch with a different name and high concept.
Compared to regular pyramid selling, kleptocoin scam has three notable differences: a) no real product, just some figures on a computer b) participants gets a cut if they recruit others who also invest, usually as a “bonus” to their wallet, c) the value of coin will rise and initially even the late joiners think they are profiting, but in the crash phase, those to joined last lose the most
Just Pay and Watch Money Roll In
Kleptocoin scam comps in two ways: active, where participants gets a bonus if they recruit based n amount invested by others, and passive, where participants just wait for appreciation, but obviously have to do initial buy-in.
In 2016, Hunan Police broke up WanfuCoin scam which was supposedly linked to “US Global Future City Developement” project, with minimum buy-in of just 1 USD, guaranteed 300% payback, may be higher.
In 2017 ChinaCoin was broken up as well. Each “unit” is $3450 RMB ($500 USD) with guaranteed 600% profit after 3 years.
Reward for recruiters
Kleptocoin scams need fresh money, and thus encourage its members to “share” the news and recruit investors, with “active rewards”.
With the WanfuCoin above, the “active” reward depends on what level the participant is (15 levels), with commission starting at 10% and only goes higher, tops out at 80% for highest level.
Obviously, no matter “active” or “passive”, all the real money put in went into pocket of scammers while the investors got back a bunch of worthless numbers. There may be occasional money released as “profit sharing”, but it’s just to placate the masses, much like Ponzi schemes.
Price is Controlled by the Mastermind Behind the Scenes
Kleptocoin scam’s “trading” was all controlled by the company itself. Initial price surge will lead to a mass cashout and the price crash left those who joined late with nothing.
In 2016, ChinaCoin started at 35 RMB after many delays. WIthin 1 hour it dropped to 10, a few days late it dropped to 2, and eventually to 0.5.
The mastermind behind the scenes has total control over trading of kleptocoins, which they can edit and nulify at any time. Any “international trading” is purely fiction. Some may even pull a full Houdini act and disappear, including the website. Then relaunch later with a different high concept.
You have to fake it to make it
Insiders point out that kleptocoins look very impressive at the start, as they often fake official credentials, or linkage with famous firms.
ChinaCoin launched claiming it was designed by a top research institute in China, with blockchain by a famous tech company in Beijing. EzMoney claimed its trading platform was endorsed by the commerce department and 4 other national level departments, “cryptocurrency demonstration project for China”, and so on.
Some scammers are shameless and will simply relaunch under a different banner. ShuMaoWang (Digital Commerce Cloud) was declared illegal in 2013, and the perp, ZhangJian was arrested in Thailand. After getting he, he relaunched the scam as WuXing Coin.
Five Characteristics of a Kleptocoin
There are significant differences between a legitimate cryptocurrency such as Bitcoin, and kelptocins.
1) Release… Cryptocurrencies are properly mined, not purchased from a single company.
2) Trade… cryptocurrencies can be exchanged anywhere, including on and off exchanges. Kleptocoins can only be traded on its own platform
3) Implementation… real cryptocurrencies are open sourced with easily auditable blockchain. Kleptocoin either cloned someone else’s blockchain algorithms, or did not bother to implement one at all.
4) Blockchain… real cryptocurrencies have easily viewed blockchain info so you can see how the coin is operating. Kleptocoins only show you volume and amount, often have no actual viewable blockchain.
5) Encryption… Cryptocurrency is obviously encrypted. Yet many kleptocoin websites do not even use HTTPS for secure link, and that extends to trading platforms and membership sites.
IN OTHER NEWS
WuXingCoin scammer ZhangJian (real name, MiQio Song), previously scammer of YunMaoWang, was extradited by Indonesia police into Chinese custody and brought back to China to stand trial.
(This section was only summarized)
Any mistakes are mine. I didn’t grammar or spell check here. Some of these coins don’t have English names at all, but I verified all of them.
Thanks! That must have taken a long time to translate and I’m sure everyone here appreciates the effort you put there!
@Oz I think there’s a mistake in your article ragarding the pretrial starting time.
“The SRC’s investigation into OneCoin began in 2015 and is currently in the pre-trial stage.”
^ Most likely a mistake. The Tengrinews translation talks about period of money deposited, which from 2015 until recenly was 2.2 billion tenge, not about starting of the investigation:
“Pre-trial investigation has been reliably established that in the period from 2015 on currently, the total amount involved suspected money of depositors amounted to 2.2 billion tenge, of which 391 million tenge were transferred to the accounts of these companies “, – reported in the SDD.”
OneCoiners say that the investigation infact started around April this year, and call your article fake because of this.
Ah yep, I read it wrong. Think I read it as “the pre-trial investigation was established in in 2015”.
Thanks for catching that.
Hi Guys. Thanks for all the effort you put ion. I’ve just recently been catching up with these “kleptocoin’ scammers, after running into a scam that really hit my pocket hard.
Maybe I’m digging up dead cows, but can anyone inform me about Bitregion? Thanks.
Reviewed BitRegion on July 1st. Search bar is on the top right of every page.
Do anyone knew the status of Bjorn Bjercke? His website seems to have been hacked….
Logged in, half an hour ago. Nothing wrong.
Aha, I found this… =) Someone is trying to miscredit….