Cryptocurrency’s popularity is undeniable. This modern-day mining of gold uses computer-based algorithms and is the latest investment trading craze. The cryptocurrency concept was popularized by Bitcoin. However, nowadays, we’ve seen numerous websites like Onecoin cryptocurrency penetrating the market to get some action.
What is Onecoin?
Onecoin, a network company offering cryptocurrency like Bitcoin with a private blockchain, is nothing short but a Ponzi scheme. It is endorsed by companies such as OneLife Network Ltd in Belize and Onecoin Ltd in Dubai. Its headquarters are located in Gibraltar with various offices in Bulgaria. However, they are now allowed to operate in several countries including the US.
The founder of this Onecoin scam is Dr. Ruja Ignatova, who originated from Bulgaria but later moved to Germany together with her family when she was just about 10 years old. According to her Tumblr account, Ignatova took up law for 2 ½ years and was ranked third overall in her country for her grades. Her official website claims that she’s an Oxford University graduate as well, but there is no proof backing up this claim. She also worked for major financial institutions after finishing her Doctorate. In addition, apart from being one of Crypto Real Investment Trust’s management team, she also wrote the book Learning for Profit.
The company is also run by Sebastian Greenwood, who is known for working with a number of shady MLM’s that were later on found out to be Ponzi scams and were brought down. He was working for the company called Unaisco before coming aboard Onecoin.
They claimed that they are next to Bitcoin as the biggest cryptocurrency but their currency is virtually worthless! In fact, Uganda’s Central Bank even warned its citizens about the Onecoin scam when it expanded to the country’s major cities. Aside from this, the government of Italy suspended the company from operating there altogether because of its pyramiding scam activities. The only thing that Onecoin crypto will rank high in is on “The World’s Biggest Scams” list.
The No. 1 cryptocurrency scam
Onecoin scam is considered today as the current leader in scams in general. What’s interesting about the whole Onecoin network is the fact that it comes from the company’s acquisition of other Ponzi schemes that failed as well as their contact details and promising them that they will be able to help them make up for what they have lost this time around. These include the following:
- An estimate of more than 10,000 members from Conligus
- Around 120,000 members from Univer Team
- More than 400,000 members from OPN, SiteTalk/Unaico
- 60,000 members from Bonofa
- 10,000 members from BNG International
Each one of the people from these companies including Onecoin’s top leaders have been synonymous with other scams and have been involved in a number of cases, and some of these people live and breathe scams!
How the Onecoin concept works
Onecoin scam claims that the core of their business is by selling educational for trading. To join, you have to become a member by purchasing educational packages. Onecoin price for the starter pack will set you back 100 euros. There are plenty of upsells and bigger packages though claiming that these can make you even more money which can go all the way up to 118,000 euros. Every package comes with what they call as “tokens” which you can then assign to mine OneCoins. They have three sites where their servers mine, two in Bulgaria and one in Hong Kong.
Every package or level with the exception of levels 6 and 7, gives new educational materials, which are plagiarized from numerous resources. The company and their recruiters claim that they do not sell cryptocurrency. But, when you attend One Coin scam recruiting seminar, you will hear these recruiters talk more about investing in OneCoin 2018 cryptocurrency and you will rarely hear about the educational materials. In order to gain access to these, you have to buy more than their starter pack. In addition, they set limitations on how much onecoin crypto you can exchange and it will also depend on the type of package you bought.
As of today, Onecoin crypto cannot be exchanged to any type of currency and the only way you can exchange them is through Onecoin Exchange, xcoinx and via an internal marketplace available for members who opted to invest more than their starter package offer.
The actual Onecoin value is yet to be determined, but according to its founder and management team, each onecoin is valued at $7.05. Conversely, Dr. Ruja decided to change the total of onecoins to be mined to 120 billion from 1.2 billion and yet the OneCoin value is still the same. It will not take a genius to know this is simply an oxymoron! The onecoin value should’ve dropped to 12cents per coin.
The process of mining Onecoin is the same as that of Bitcoin. The company claims that they use advanced algorithms as well that was created by three highly smart individuals from India. According to them, this is how it basically works:
- The algorithm will be set up using “powerful computers” (or so they say), and then it will start to find onecoins or solutions that Onecoin have.
- The mining can’t be altered or stopped in any way once it has started. Moreover, they claim that it’ll be even harder to find new solutions whenever more solutions are found.
- They use the so-called token method to mine and once the difficulty level of mining reaches an even harder level, the required amount of tokens needed for one coin to be mined will increase in order to compensate for the additional cost for trying to find new solutions.
That’s a big red flag right there. What this Onecoin scam wants people to believe is that the difficulty of mining will increase over time because of that 2.1 billion probability of solving blocks. This is actually not true and it completely misrepresents on how blocks are cracked or solved. Keep in mind that onecoins are privately mined and the company has no competition. They have the complete computing power, so basically they are the ones who will always win. They own everything and it does not matter how much computer power they have since difficulty rate will be adjusted automatically to average a block that has been resolved every 10 minutes. Learn more about mining.
Aside from putting a spin on their story, Onecoin uses cryptocurrency terms such as difficulty and mining to fool numerous uninformed individuals. If you know how cryptocurrencies really work and if you will carefully listen, you’ll find that when this Onecoin scam explains mining, what they’re really telling you is about exchanging your tokes for more one coins. And when they talk about mining difficulty, what they’re really talking about is the exchange rate. In reality, when you’re mining real cryptocurrencies, there’s no telling in advance what your resulting income would be.
Onecoin scam and its claims
Yes, their website may look really professional and claim the following:
- Global financial empowerment.
- The company claims that they use Know Your Customer or KYC policies as well as working proactively with governments making them transparent.
- Providing the masses knowledge about the advantages of cryptocurrencies.
- Onecoin is safe and guarantees that they comply with the Anti-Money Laundering regulations.
- There are about 120 billion Onecoins.
- The company uses only the most advanced technology in processing their members’ transactions compared to other competitors.
However, if you will scroll down the page, it says that if you have any questions, you can simply ask its founder Dr. Ruja via her blog and once you clicked on that link, you will only get a coming soon page.
The Onecoin network
Onecoin scam uses a business format called multi-level marketing, unlike others of its kind. Everything is run through the OneLife site and for members to mine Onecoins, they must buy packages that are supposed to come with educational materials.
Any MLM scam will not be complete if they will not want their members to recruit. Or if they will not use something confusing and unnecessary such as a compensation plan that comes with a vague explanation on you can earn money doing so.
The Onecoin scam does not pay you in their onecoin cryptocurrency or in your local money, instead, you get tokens! Although there are some ways on how you can earn money, you only get 60% of those on your cash account, while the remaining 40% will go to your so-called mandatory account. You can only use your cash accounts to buy more onecoins or packages, while a portion of what you earn will go to the mandatory account where it will stay there in order to continuously mine more Onecoins. It is still unclear whether all of it turns into a real currency that’s accepted widely or not.
Here’s how the compensation plan works:
- Direct sales: you will earn a 10% commission from personal sales.
- Network bonus: you will earn a 10% commission from the weaker leg under you.
- Matching bonus: this will depend on the type of package you purchased and it can go up to 4 generations and 25%.
- Start-up bonus: you will get an added 10% personal commission during the first 30 days, so that’s 20% commission on your first month.
- One life club: you can get bonus points which you can exchange for luxury goods, vacations, and other stuff.
- Splits: this part is quite interesting. Basically, whenever this Onecoin scam hits their number target of members, they can double whatever amount of tokes you have in your account. They said that when more members join, the demand for onecoin cryptocurrency increases as well as its value. But since they don’t want the price to explode, they will randomly select which members will get the split.
As mentioned earlier, the Central Bank of Uganda has released a warning to all its citizens regarding the company. Moreover, the Hungarian Central Bank has also released a statement regarding the Onecoin scam and the operation of OneLife being an illegal pyramiding scam. On the other hand, Italy has banned every activity of Onecoin in the country in 2017 due to it being a scam, while in Bulgaria, Croatia and several European countries have also issued a warning against the company.
Arrests have been made in China on Onecoin members and investors in 2016. The Chinese government apprehended around $31,000 worth of assets.
Non-acceptance of cryptocurrency
According to Bitcoin, each cryptocurrency being used will accept another one as a mode of payment. Onecoin, on the other hand, does not accept any other cryptocurrency. So the only way you can pay is by using your credit card, debit card or through bank wire.
CoinMarketCap is a website which keeps a list of all feasible cryptocurrencies. And surprise, surprise, Onecoin is not listed anywhere at the site.
What we can learn from Onecoin
Onecoin is your typical get-rich-quick scheme, where you will hear claims that you will get rich quick as well as earn profit sitting at home. It claims to be the “biggest competitor of Bitcoin”, the market leader of cryptocurrencies. However, unlike Bitcoin, onecoin is worthless and the only thing you can buy with them are Onecoin packages or even more onecoins. Aside from this, there’s no actual mining, you simply give your money to Dr. Ruja for a stated rate and that onecoin amount is created out of thin air and then credited to your account.
Scams like these take advantage of people by luring them with promises of getting rich without doing anything. Always keep in mind that if it sounds too good to be true, then it probably is. It is also important to be very, very careful with new cryptocurrencies out there as most of them are scams and worthless. Though blockchains can either be private or public, it is a must for a company to use a public blockchain for transparency, which Onecoin refused to do so.
How to determine if a coin is legit
There are numerous criteria and ways on how to detect whether a cryptocurrency is legit or a scam. Here are some of the things you need to check out before investing in one:
- Blockchain: If the cryptocurrency was created on the blockchain of either Bitcoin or Ethereum, then it is legit on some levels.
- Function: The crypto company offers a business plan or model within its cryptocurrency which will be able to solve a definite problem for a massive network to market.
- Liquidity: It is not hard to liquidate your cryptocurrency’s commodity asset and exchange it back into your local currency or other cryptocurrencies.
- Hype Marketing: The company has policies that meet the financial services and technology’s advertising practices standards, as given by ASIC, SEC or other regulatory bodies.
- People and company: The brains behind the crypto companies should not have any background on Ponzi schemes and should possess ethical qualities. The company itself should operate with obscurantism and transparency.
In a Nutshell
There is no doubt that Onecoin is a scam. The company is not allowed to operate in numerous countries and the SEC of the United States will kick them in the gutter in an instant. Warnings are even being issued in countries like Africa where scams like these are rampant. There are a plethora of cryptocurrencies out there and if you’re interested in mining or a beginner who wants to learn more about it, we have all the necessary information you need to know in order to avoid scams like Onecoin.
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