Germany freeze OneCoin’s bank accounts, issue cease and desist
The conclusion of the investigation, led by the country’s top financial services regulator, saw remaining known bank accounts in the name of IMS International Marketing Services GmbH ordered frozen on the 17th and 20th of February.
As acknowledged by BaFin, IMS International Marketing is one of the many shell companies OneCoin use to launder invested funds around the world.
BaFin’s reasoning for the freeze is OneCoin’s lack of appropriate regulatory registration.
On behalf of Onecoin Ltd, IMS International Marketing Services GmbH had investors who had bidden to buy “OneCoins” transfer the sales price to various accounts held by IMS International Marketing Services GmbH with different banks in Germany and forwarded the money on behalf of Onecoin Ltd to third parties, based in particular outside of Germany.
BaFin see OneCoin’s business model as a “money remittance business”, which requires authorization from BaFin.
Owing to it being a Ponzi scheme, globally OneCoin hasn’t registered with a financial services regulator in any jurisdiction it operates.
Instead, the company spends its legal budget soliciting opinions on the legality of Ponzi schemes to circulate on social media.
Despite an estimated 29 million EUR frozen in German bank accounts since February, OneCoin to date has made no public announcement regarding BaFin’s freeze order.
BaFin identify OneCoin as a Dubai corporation and escalated the bank freeze with a cease and desist issued on April 5th.
If OneCoin fail to “immediately cease and wind down” all operations in Germany, BaFin have threatened the company with fines totalling 1.65 million EUR.
Part of the “winding down” requires OneCoin to return recently invested funds to affiliates (as of April, 2017).
Unfortunately for duped OneCoin investors though, BaFin are unable to assist them with fund recovery. The regulator claims it
does not have the right to decide as to the validity under civil law of the “OneCoins” sales contracts. It may therefore not answer questions of this nature.
What’s particularly interesting about BaFin’s press-release is they reveal
between December 2015 and December 2016, IMS International Marketing Services GmbH took in, in total, approximately 360 million euros ($381 million USD) on behalf of Onecoin Ltd.
Just a few days ago, OneCoin had Business For Home publish a PR fluff piece claiming the company was taking in $500 million a month.
From $381 million dollars invested annually to $500 million a month in just a few short months? It doesn’t really add up, does it.