One Coin, Much Scam: Swedish Bitcoin Foundation Issues Warning Against OneCoin
The Swedish Bitcoin Foundation released an official statement regarding OneCoin, a cryptocurrency Ponzi scheme that has been around since early 2015.
The Swedish Bitcoin Foundation calls OneCoin, a cryptocurrency that has been around since early 2015, “a pyramide”, “a fraud” and warns against dealing with it.
Mats Henricson, the chairman of the Swedish Bitcoin Foundation, wrote in an official statement that the organization believes OneCoin is a fraud and that users who are relatively new to digital currencies and the cryptocurrency industry must be cautious when approaching OneCoin-related programs.
“OneCoin has grown immensely large and billions have been put into this phenomenon. But OneCoin is not like the other crypto currencies such as Bitcoin.”
He further stated that the technical aspects of the “cryptocurrency” is vulnerable and broken, while the economical side of OneCoin proves its fraudulent “pyramid scheme-like” structure.
“We therefore conclude that OneCoin is a fraud and therefore call for caution.”
A successful scam?
OneCoin gained serious momentum in late 2015, as users began to invest millions of dollars into the digital currency expecting some sort of guaranteed profits which they were promised. Users were particularly allured by the OneCoin development team, who falsely stated that the cryptocurrency was being utilized by millions of people worldwide.
The cryptocurrency became increasingly popular amongst beginner cryptocurrency enthusiasts and investors who lacked significant knowledge in cryptography in general and the fundamentals of digital currencies.
To begin with, OneCoin is not an open-source software. Despite the OneCoin development team’s claims, none of OneCoin’s codes were released via platforms like Github, most likely due the fear and concerns of the development team that other experts in the field might expose the broken cryptography behind the cryptocurrency.
More importantly, OneCoin is not based on a public ledger. Its transactions can’t be tracked elsewhere and it doesn’t represent decentralization as other cryptocurrencies do, like Bitcoin & Monero. It is even difficult to categorize OneCoin as a cryptocurrency due to its ambiguous structure and its core infrastructure that isn’t based on a public and open Blockchain.
According to Behind MLM, a multi-level marketing research organization, the Onecoin structure can be summarised in three main points:
“The first is a simple recruitment-driven pyramid scheme, backed with a residual binary compensation structure. Affiliates join OneCoin and are then directly compensated on the recruitment of new affiliates, who must spend money on packages to participate in the MLM opportunity.
The second is the whole Aurum Gold Coins schtick, which appears to be an alternative virtual currency to the OneTokens, and are backed by baloney.
The third and most secretive component is the OneCoin token share scheme.”
The establishment of active cryptocurrency organizations like the Swedish Bitcoin Foundation help the creation and improvement of enhanced ecosystems for both businesses and users in the digital currency industry.
The efforts of the Swedish Bitcoin Foundation in taking the necessary steps to warn local cryptocurrency users against scams and Ponzi schemes should be appreciated and supported by the community.