A major Australian regulator has warned investors away from the alleged OneCoin scam, which has seen allegations of serious cryptocurrency fraud levelled against it.
In a statement posted on its website, the Australian Securities and Exchange Commission has warned investors to “not deal with this business” over concerns about its legitimacy.
It said OneCoin “could be involved in a scam” and pointed out that the firm did not hold the right to trade in Australia.
“ASIC advises this company could be involved in a scam”, the statement said.
“Do not deal with this business as it is unlicensed in Australia.”
According to ASIC, the firm is registered to the city of Sofia in Bulgaria.
“The business listed below has made unsolicited calls or sent emails about investing, financial advice, credit or loans and does not hold a current Australian Financial Services (AFS) licence or an Australian Credit licence from ASIC”, it added.
OneCoin has faced a number of allegations recently, including the suggestion that it was responsible for a $2 billion pyramid scheme.
Its leaders, Ruja Ignatova and Konstantin Ignatov, have been indicted by the office of the US Attorney for the Southern District of New York on charges as diverse as money laundering and wire fraud.
It is accused of creating a Ponzi scheme, and one alleged victim has come forward to say that she has suffered losses equal to $130,000 US dollars under the scheme.
In a statement at the time of the indictment, US Attorney Geoffrey Berman said that “these defendants created a multibillion-dollar ‘cryptocurrency’ company based completely on lies and deceit”.
However, the firm and those behind it have denied the allegations.
In a statement, it denied that it requires its agents – or Independent Marketing Associates, or IMAs, as it calls them – to find others in order to derive bonuses.
“IMAs’ success depends entirely on their personal commitment, abilities and effort”, OneCoin said in a statement.
“IMAs can obtain an educational package and can only receive a bonus for their marketing activity, meaning they are not obliged to incur any additional expenses or recruit a new IMA.”
It also emphasised what it said was the self-employed nature of IMAs who work within its system – and argued that those affected were not consumers.
“The users which are part of the OneLife Network are NOT consumers. They are IMAs, meaning they are self-employed business owners”, its statement added.
More broadly, arrests have been made across the world in relation to the alleged scam.
Almost 100 people have prosecuted in China alone. In China, it is known as Weika Coin, and some of those involved have even been sent to prison.
In India, almost thirty people have been arrested.
A law enforcement officer told a local newspaper, The Indian Express, that there were clear hallmarks of a Ponzi scheme at play.
“In this sort of scheme, investors become the perpetrators as well as victims. It is clear that this is a Ponzi scheme”, Tushar Doshi was quoted as saying.