OneCoin Claims It's Not a Ponzi or Pyramid Scheme

The OneCoin cryptocurrency investment project has responded to the suggestion it is a Ponzi or pyramid scheme, arguing it does not fit the narrow definition of either.

In a report by Samoa Observer on May 14, the Central Bank of Samoa is quoted as saying last month that OneCoin is a "Hybrid ponzi-pyramid scheme" which "Laundered money through New Zealand to Samoa" and was targeting local residents through churches.

After the Observer reported the warning, it said it received a statement from OneCoin presenting its claims as to why it is neither Ponzi nor pyramid scheme.

It firstly offered up a definition of Ponzi schemes as arrangements where "Revenue for old investors is generated through the investment of new investors." It also said that, regarding legislation on pyramid schemes, "Its origin and its express purpose is consumer protection."

OneCoin goes on to make the argument that because when IMAs join the scheme they sign a contract classifying them as "An independent, self-employed business owner," they cannot be defined as consumers who are protected under general legislation.

In effect, OneCoin says it's not a pyramid scheme because any financial harm to agents can't be classed under a dictionary definition of pyramid scheme, and it's not a Ponzi scheme because, although heavily incentivized to do so, it's not compulsory for IMAs to recruit new agents.

The statement further claims that as a "Centralized, closed source cryptocurrency" with "Strict" anti-money laundering and know-your-customer rules, OneCoin "Is much more compliant than decentralized."

The scheme has also been the subject of fraud warnings from authorities in numerous nations, while people associated with OneCoin have been arrested and charged in China and India.

A lawsuit, filed in New York last week by law firm Silver Miller on behalf of investor Christine Grablis, alleges that OneCoin fraudulently promoted cryptocurrency investments and violated federal securities laws.

Grablis claims she lost $130,000 through the scheme.