Consumer Watchdog in Italy Moves Against OneCoin Investment Scheme

Regulators in Italy have moved to suspend the operations of several affiliates of OneCoin, the digital currency investment scheme widely accused of being fraudulent.

Late last month, the Italian Antitrust Authority, a quasi-autonomous non-governmental organization that focuses on consumer protection, said that it had ordered the "precautionary suspension" of the efforts, led by three unnamed individuals. The Antitrust Authority is funded by Italy’s Ministry of Economic Development.

The Antitrust Authority said that its investigation of OneCoin – which accelerated in December with a preliminary injunction against three affiliates – found that most of the money generated came from recruitment efforts. Those who take part in the OneCoin scheme purchase packages of "tokens" that can later be redeemed on an online website or sold to others, who in turn are encouraged to find buyers of their own.

The Antitrust Authority said (in a translated statement):

"In fact, the bulk of the revenues...derives not so much from the purchase of [the] virtual currency OneCoin but rather by the payment of fees that consumers are requested to bear in the accession to the system, which in time to reach the goal of profit, appear to be required to recruit other consumers. These arrangements appear attributable to the typical dynamics of pyramid schemes."

The suspension is one of the most aggressive moves to date against OneCoin, which has been accused of misleading buyers by promising big gains on its eponymous digital currency.

Central banks in Africa, including those in Nigeria and Uganda, have issued strongly-worded advisories about the scheme.

Regulators in Belgium and the UK, too, have warned consumers about OneCoin. In the UK, the London police are said to be investigating the scheme as well.

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