A dubious cryptocurrency is under investigation by police in the United Kingdom following allegations that it is nothing more than a Ponzi scheme.

Called Onecoin, the cryptocurrency first appeared in around 2015 and is being promoted as the next bitcoin.

The coin was promoted through a series of seminars and websites, which bizarrely offered to sell not the coins themselves but tokens that could be used to mine coins from Onecoin’s alleged blockchain. Those tokens could only be sold by Independent Affiliates (IA), that is other people who had already signed up to the program, with each IA gaining a 10 percent cut of each sale.

Word that all was not what it seemed with Onecoin first emerged in February when Andrew Penman at The Mirror attended a seminar attended by 1,000 people being held by the company where dubious claims that people could get rich were made.

Entry into the program isn’t cheap either, with prices ranging from a £100 ($130) Starter Package to £28,000 ($36,500) for a Special Combo Package, with some deals involving so-called “splits” which double the number of tokens purchased.

Further allegations that Onecoin was a Ponzi scam emerged on Bitcoin.com in June, when Tim Tayshun described Onecoin as a Ponzi and cryptocurrency MLM scandal.

Interestingly Onecoin was compared to the notorious MMM Global bitcoin scam.

There are both differences and frightening similarities. MMM Global at one point had from 5 to 40 million Members who lost up to $10 billion…This is the power, deception and replication model of the ponzi world. Juha Pariala, their Top Leader, whom Onecoin claims is making $4MM per month has a motto, “Duplication is Everything!”

By comparison, Onecoin is only 22 months young, although it claims to have brought in $4.1 Billion Euro from an alleged Membership of over 2.1 million Independent Affiliates (IA’s) during this time. Affiliates purchase  “Cryptocurrency (mis)Education Packages” … all come with (ponzi-) tokens for “mining” (ponzi-) coins; however, there is NO “mining,” as you could have guessed, as the function of this system is based directly on exchanging “X” amount of tokens for “X” amount of coins, under the false premise that all members are “mining” a coin.”

Warning

The United Kingdom Financial Control Authority said in a statement that they “believe consumers should be wary of dealing with OneCoin, which claims to offer the chance to make money through the trading and ‘mining’ of virtual currencies. This firm is not authorized by us and we do not believe it is undertaking any activities that require our authorization. However, we are concerned about the potential risks this firm poses to UK consumers. As OneCoin is not authorized, consumers who deal with it will have no protection from the Financial Ombudsman Service or the Financial Services Compensation Scheme.”

The authority noted that Onecoin is currently being investigated by the City of London Police and that anyone who has been a victim of the scam should contact Action Fraud  or telephone them (in the U.K.) on 0300 123 2040.

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