Earlier this week the Chinese government announced it was banning Initial Coin Offerings (ICOs).
The move is understandable as, while some might be legit, by and large cryptocurrency ICOs were and continue to be a front for financial fraud.
Those running them make promises based on nothing and gullible investors hand over their money (pumping the ICO).
What ultimately happens is those running the ICO cut and run with invested funds, or they launch a worthless altcoin which then proceeds to immediately crash (and then run away with invested funds).
OneCoin is a good example of this, with the Chinese government’s announcement having a significant impact on their ICO ruse.
OneCoin, along with every other MLM Ponzi points scam, solicits investment on the promise of a public coin launch.
What with China historically OneCoin’s largest source of investment revenue, they’ve no doubt been fielding a ton of questions since the Monday announcement.
Despite OneCoin already being illegal in mainland China, affiliate recruitment has continued unofficially through underground channels.
This recruitment is based on the same business model OneCoin is promoted on globally: Invest in OneCoin points, something-something one day the coin will go public and everyone with OneCoin points will become a billionaire overnight.
In a September 6th “news flash“, OneCoin advised;
In order to comply with the recently imposed regulations of the People’s Bank of China, the OneLife Network is informing all users of the OneLife & OneAcademy, that educational courses, related to the ICO activity of OneCoin will not be provided to Chinese members.
For compliance reasons any OneLife educational course sold on the territory of People’s Republic of China will not include any ICO related features and/or materials during the OneCoin ICO campaign.
ONE cryptocurrency is planned to float on a public exchange October, 2018.
That’s fine going forward, but what about Chinese affiliates who together have invested hundreds of millions of dollars?
OneCoin themselves acknowledge that the Chinese government has ordered
companies and individuals in the process of an ICO, enabling the financing of tokens should return the accumulated funding and adopt the necessary measures to reasonably protect the interests of all stakeholders, following the regulation.
OneCoin Ponzi points are tokens, so that’d mean OneCoin should be refunding their entire Chinese investor base no?
The problem with this is a large percentage of invested funds have already been used to pay pyramid recruitment commissions with.
It is likely that refunding all their Chinese investors, as now legally required by Chinese law, would bankrupt OneCoin entirely.
And so you wind up with waffle about educational packages that, within the context of the Chinese ICO ban, makes no sense.
Nobody in China paid thousands of dollars for copy and pasted Wikipedia PDF files. They invested in OneCoin Ponzi points on the promise of an eventual public ICO and future riches through public trading.
Even if that never eventuates (nobody outside of OneCoin is interested in their inflated value Ponzi points), the fact remains that the motive for investment is no different to any other ICO.
That binds OneCoin to Chinese law, despite their apparent insistence otherwise.
With hundreds of thousands of thousands (over a million?) Chinese OneCoin investors now legally entitled to a refund, what happens next is unclear.