OneCoin and alleged fraud in the millions – in the style of a globally active snowball system, the Dubai-based company OneCoin Ltd. is said to have ripped off its investors.

“Investors’ claims for damages against OneCoin intermediaries are conceivable, provided that the intermediaries have advised their victims prior to joining OneCoin. Furthermore, claims against the operators and backers of OneCoin are also possible.”

Finance FWD

OneCoin – Latest news about the Fraud of the alleged Crypto Currency

November 2020 – Positive news for affected investors – Prosecution in Germany – Criminal proceedings within reach

After investigations against the operators of the invented crypto currency OneCoin have been in full progress for quite some time in the USA, there are now new developments in Germany as well. The new developments, which are positive from the investor’s point of view, offer new possibilities to recover lost money.
For the first time since the big scandal about the invented crypto-currency OneCoin became public, a German Public Prosecutor’s office has now brought charges against three accused persons in connection with OneCoin before the regional court of Münster (s. report of the Handelsblatt). Thus, a first German criminal process against parties involved in the OneCoin investment fraud may be imminent.

The lawyers of the law firm Herfurtner advise investors, who have lost money in connection with the pseudo crypto-currency OneCoin money and provide possibilities, how to recover lost money.

In the focus of the charge of the public prosecutor’s office Bielefeld are 3 accused persons, one of whom is accused of having laundered money and assisted in foreign transfers. The two other accused persons are accused of having carried out payment services without the necessary authorisation and thus transferred more than 300 million euros of affected investors abroad.

Affected investors can use the contact form of the law firm Herfurtner to contact lawyers who, with their experience in banking and capital market law, can advise on the possibilities of asserting their claims in a free initial consultation.

Among other legal procedures, the assertion of the claims of the affected parties in criminal proceedings by means of the german “Adhäsionsverfahren” as well as the obtaining of a court order of arrest of assets can be examined.
In connection with OneCoin, the Oberlandesgericht Hamm has already decided in its decision of January 4th, 2018 (Ref. 4 Ws 196/17 and 197/17 OLG Hamm) that a company which is alleged to have carried out payment services without the necessary licence and whose managing director is therefore suspected of a well-founded criminal offence may be subject to a property arrest (press release).

It is also important to know that not only the operators and inventors of the crypto currency OneCoin are liable for any damages incurred. Claims may also be asserted against those who resell OneCoin and offer services in connection with OneCoin.

November 2019 – Arrest and confession of a OneCoin operator

According to current media reports in the German magazines Handelsblatt and Stern, the brother of the self-proclaimed cryptoqueen, Dr. Ruja Ignatova, has fallen into the FBI’s clutches.

It is the German-Bulgarian Konstantin Ignatov, who helped his sister from 2017 on to rob countless people of their savings with the hype about crypto-currencies. However, the company OneCoin is not a lucrative investment idea in a promising crypto currency, but a fraudulent multilevel marketing system – so-called snowball system.

Until now, the operators and middlemen of OneCoin had regularly denied the accusations and suspicions of fraud on the Internet and vehemently defended the authenticity of the currency.

However, this should now come to an end, now that the detainee is supposed to have made a comprehensive confession to the FBI, which fully confirms all previous accusations and fears.

Confession to the OneCoin Pyramid Scheme

The brother of Dr. Ignatova now faces up to 90 years in prison in the USA. In order to avoid such a punishment, he was prepared to give the authorities deep insights into the pyramid scheme of OneCoin.

In addition, he is said to have given the investigators clues about the whereabouts of his sister, who is probably making a good living with the main part of the swindled money at the moment.

According to a BBC podcast, she is even said to have connections to the Bulgarian mafia. Her brother is therefore now considered at risk and it is reported that Mr Ignatova is to be placed in a witness protection programme.

Where is the Investors’ Money?

The authorities hope that Mr Ignatov’s statements will provide further indications as to where the investors’ money has gone. The investors had to transfer their money to constantly changing accounts. For the aggrieved investors, the arrest of the OneCoin backer now means new hope.

The lawyers of the law firm Herfurtner advise affected investors about their legal possibilities.

The questionable business with the crypto currency OneCoin has been in the sights of the authorities for a long time, public prosecutors are investigating and accounts have been frozen.

Investors who have been harmed by the “company” should not lose any time now and consider legal advice from a lawyer.

Recently it seems to have become quieter around the much-discussed crypto currency OneCoin, which according to its own statement is serious and honest with investors, unlike other new means of payment such as Bitcoin.

OneCoin Ltd and OneLife Network Ltd

“Take part in the financial revolution,” is the pompous claim on the onecoin.eu website. There, the “visionary” and founder Dr. Ruja Ignatova from Bulgaria presents her crypto currency OneCoin, allegedly the second largest in the world, with a market capitalization of 4.41 billion. It is undisputed, however, that trading with OneCoin has now been partially banned and is called a snowball system.

In Germany alone, investors invested funds amounting to 360 million euros. There are thousands of potential injured parties who are currently fearing for their savings.

“Anyone who has invested in OneCoin should seek legal advice – the sooner the better. Incidentally, having the providers’ headquarters in Dubai or Belize is not an insurmountable hurdle when it comes to exhausting legal means”.

The companies behind the scheme are OneCoin Ltd, based in Dubai and OneLife Network Ltd, based in Belize.

Experience with OneCoin: how does the “Scam” work?

In the case of OneCoin and OneLife, the providers do not necessarily advertise the crypto currency, but rather the training packages, whose price can reach up to 27,500 euros. In the context of recruiting events, meetings or consultations, however, intensive investments in the crypto currency are then recommended according to experience on this matter.

For the sales generated by recommendations, commissions beckon, which are distributed proportionally to a cash account and a trading account for OneCoins. According to experience reports, this real money payout takes a long time or may soon no longer be possible due to the negative headlines.

Although the official reports have faded, it still seems that people who have no confidence in traditional forms of investment are still investing their savings in OneCoin. They believe, as promised by the advertising information on the website, that this crypto currency is on the verge of a breakthrough.

Confidence in OneCoin is reinforced by the fact that OneCoin is traded as an insider tip in social networks or among friends. For example, it has happened that those willing to invest were asked to keep several thousand US dollars ready at home, so that they could be collected in cash and then invested, supposedly safely. Other independent financial advisors also sell OneCoin convincingly as an alternative investment.

The proponents argue that OneCoin will be a sure-fire success in the future and refer to the recent success stories of other companies that only became successful through the Internet – a development that nobody could believe in 20 years ago.

Is OneCoin worthless?

Does the “currency” itself have a value or is the crypto currency a pure rip-off? Until a few months ago, investors with purchasing power could exchange their digital coins for other currencies via the OneCoin Exchange platform. This method is no longer available today.

OneCoins can currently only be exchanged for various offers via the company’s own website dealshaker.com. Advocates then refer to the planned IPO of OneCoin in 2018, in the course of which the currency could be freely traded. Whether this is actually realistic remains highly questionable.

Whether the supposedly imminent IPO can actually be implemented seems questionable. OneCoin is still being advertised by its own community. The self-interest of the people who distribute this advertising should not be disregarded. Since OneCoin, according to its own statement, depends on the demand of its participants – why would they not want to drive up the demand themselves? There is still talk within the social networks where the participants in the OneCoin system exchange information about the enormous profit margins that can be expected when the IPO takes place.

Authorities and public prosecutors investigate

The demise of OneCoin seems to be sealed – the negative reports are accumulating and the authorities are taking action against the providers OneCoin Ltd and OneLife Network Ltd. In December 2016, AGCM, the Italian competition authority, already pointed out that the company could be a system of fraud.

Experience with Onecoin, for example, has shown that the promised profits in particular seem completely utopian – an investment of 140 euros was supposed to be turned into 2,800 euros in 2 years. On 27 February, AGCM pulled the ripcord and prohibited all activities in Italy connected with the provider.

BaFin prohibits the OneCoin

In Germany, the financial supervisory authority BaFin became active in the case back in February. This affected IMS International Marketing Services GmbH, which acted on behalf of Onecoin Ltd. and took over sales tasks. In other words: Anyone wishing to acquire OneCoins had to transfer the relevant funds to various accounts within the company.

IMS eventually transferred these OneCoin funds to third parties, including abroad. However, such a money transfer transaction requires a licence pursuant to Section 8(1), first sentence, of the German Act on the Supervision of the Transfer of Funds (ZAG). This was not available. BaFin then blocked active accounts with funds amounting to 29 million euros. At the same time, it was ordered that IMS had to discontinue and wind up its business activities. In the event of an infringement of the order to cease operations, a fine of 1.5 million euros is threatened.

Finally, on 18 April, BaFin also instructed Onecoin Ltd. of Dubai to immediately cease its business activities via IMS International Marketing Services GmbH. This was followed by the final shutdown of the company in Germany on 27 April. BaFin prohibited both Onecoin Ltd (Dubai) and OneLife Network Ltd (Belize) from doing any business with OneCoin – this included advertising, distribution and sale of OneCoin. In this context, the company One Network Services Ltd from Bulgaria was also banned from supporting activities. The legal background is the lack of a permit for the transactions considered by Bafin as proprietary trading.

OneCoin as a global Pyramid System?

Even the operators of websites themselves make no secret of which form of distribution they have chosen. They use the classic Ponzi scheme: there is always an incredible success story that is “revealed” by the person who “got rich with it. The characters tell enthusiastically, are charismatic and – this is especially important – show solidarity: “Quite normal people like me become a millionaire overnight – then you can do that too!

Training materials and “tokens” are still sold in packages with this advertising message. Everyone has to start small at first and then “work their way up”, the higher you stand, the more you can earn. The possibilities are seemingly endless, onecoin success stories continue to spread virally on the Internet, and millions of participants worldwide are convinced that everything will pay off at the latest when the company goes public. There are various fixed dates for this IPO in circulation. The only thing that is certain is that onecoin investors all believe in it.

Onecoin Seminars and Sales Forms

In many countries within and outside Europe Onecoin is monitored or warned of the system. As early as February 2016, the British newspaper “Daily Mirror” reported that it was a “practically worthless” form of investment: the article describes the course of a typical seminar. It also shows that an investor who purchases packages of “tokens” does not invest in the currency itself. Participants are encouraged to recruit their friends and relatives as “traders” in order to increase their profits. According to the author of the Daily Mirror, the seminar was reminiscent of a pure sales event. The speakers, which included the face of Onecoin, Dr. Ruja Ignatova, did not allow any questions after the seminar, but disappeared backstage.

On 23 April 2017, 18 people were arrested at a recruitment event in India. There they tried to inspire the participants to invest in investments that promised high returns in 2018. There were also undercover investigators in the audience, who eventually stopped the event and arrested 18 people.

The company did not have the necessary licences and was not registered with the Reserve Bank of India. During the investigation, more than 7 million US dollars in Indian accounts were frozen and a further 11.1 million US dollars were transferred abroad before the authorities could intervene. Investigators are now trying to follow the trail of the alleged fraud.

Global dimensions?

Reports from China at the latest show that the transactions could be a fraud with global dimensions. There, some investors were arrested and accounts with funds amounting to almost 46 million US dollars were frozen. The authorities there estimate that thousands of Chinese investors have put more than 90 million euros into the “pyramid system”.

On May 29, IFSC Belize, the country’s financial regulator, issued a warning and a cease and desist order for the operations of OneLife Network Ltd. The company is not licensed and investors should exercise “extreme caution”. In addition to the countries mentioned above, warnings were issued in Finland, Sweden, Bulgaria, Norway, Latvia, Croatia, Thailand and other countries against the alleged rip-off with the digital currency.

Crypto Currencies

Crypto currencies are virtual currencies that are offered independently of banks and authorities. They are traded anonymously and encrypted; they are not managed centrally, but on the computers of many users. In addition to numerous advantages, there are also security concerns, for example due to possible data loss through technical failure, malware, manipulation and cybercrime. For example, it was only in August 2016 that Bitcoins worth 58 million euros were lost on the Hong Kong Bitcoin exchange Bitfinex in a hacker attack.

With unbroken zeal, the company promotes itself, in the German-language version of the website, for example at https://www.onecoin.eu/de/about. Thereby the offerers find beautiful words. For example, under the heading: “What is Onecoin?”

“OneCoin is a digital currency based on cryptography and is created through a process called “mining”. Just like the serial number on an invoice, each digital coin is unique. Since crypto currencies are not tied to a specific country or central bank, the value of the coin depends on factors such as usability, supply and demand. By joining OneCoin, OneCoin customers will become part of a global network of millions of … The new, unique … block chain will set a new industry standard … With its limited number of 120 billion coins, OneCoin is also the world’s largest reserve crypto currency.

OneCoin as an Alternative for Investors with bad Experiences?

If you take a closer look at this text, it becomes clear with which fears and wishes the user plays OneCoin. The idea is to “mine” “unique” coins, of which there is only a limited supply. It is not only alluded to the pioneering spirit of the gold-diggers in the Wild West – and thus to the dream of fantastic wealth through hard work and a little bit of luck.

The operators go one step further and use terms such as “government money”, “central bank”, “inflation” and “counterfeiting” as negative opposites from which the “largest reserve crypto currency” OneCoin is distinguished. Allegedly, as part of a worldwide network, OneCoin should be able to pay and transfer money anywhere. That this does not work without the additional use of real bank accounts has been shown by the case of IMS GmbH mentioned above.

Legal Possibilities against the alleged OneCoin Fraud

Many investors in Germany and other countries now fear considerable losses due to the investment in digital means of payment or other offers of the companies OneCoin Ltd and OneLife Network Ltd. What to do if payouts are not made or the digital currency can no longer be “converted” back into real means of payment?

However, the snowball system could also have even more far-reaching consequences for injured parties – for example, in the event of the insolvency of IMS International Marketing Service GmbH. Insolvency administrators could then claim back payments already received from investors in accordance with § 134 InsO. Possible inconsistencies on the part of the provider IMS could, however, prevent this.

It requires a detailed examination by a lawyer with experience in specialist areas such as investor protection, capital market law, banking law or investment fraud. Against this background, legal protection and a forward-looking use of legal remedies appear to be essential.

Legal Advice for affected Investors

Dubious business practices, non-transparent clauses or a remote overseas jurisdiction: in this case, there are hurdles that make it necessary for affected investors to consult a lawyer. At the latest when counterclaims are received from an insolvency administrator or there is a fear of total loss of invested funds, one should consider engaging a law firm that is familiar with areas such as investment fraud, banking and capital market law or banking law.

The Herfurtner law firm and its lawyers look after clients who have had bad experiences with OneCoin or the companies OneCoin Ltd and OneLife Network Ltd – in Germany as well as throughout Europe.