Skip to Content

Tuesday, July 16th, 2019

TWO MEN CHARGED FOR PROMOTING A MULTI-LEVEL MARKETING SCHEME INVOLVING CRYPTOCURRENCY (ONECOIN)

Closed
by April 10, 2019 Business

In the first case of its kind, following investigations by the Commercial Affairs Department, two men have been charged in court on 10 April 2019 for promoting a multi-level marketing scheme involving a purported cryptocurrency, OneCoin. One of them was also charged for incorporating a company, One Concept Pte Ltd, to promote the multi-level marketing scheme.

Local residents participated in the scheme by buying online educational courses bundled with promotional tokens. The promotional tokens could be used to ‘mine’ for OneCoins. Participants who brought in new participants were also entitled to overriding commissions in contravention of the Multi-Level Marketing and Pyramid Selling (Prohibition) Act.

The supposed cryptocurrency OneCoin is purportedly founded by a Bulgarian, and has several features that are similar to Bitcoin. Several countries, including New Zealand[1], have issued warnings to the members of the public against having involvement with OneCoin. The United States have termed OneCoin a fraudulent cryptocurrency, and charged persons in connection with OneCoin[2].

The Monetary Authority of Singapore (MAS) has also listed OneCoin and One Concept Pte Ltd on the Investor Alert List (IAL). This information is available on the MAS website (http://www.mas.gov.sg/IAL.aspx). The IAL is a non-exhaustive list of unregulated entities who may have been wrongly perceived as being licensed or authorised by the MAS. The IAL is based on what was known to MAS at the time of publication. The fact that a company is listed on the IAL does not necessarily mean that it has breached any of MAS’ regulations. However, investors should bear in mind that these entities have had a past record of being wrongly perceived by others as being licensed by the MAS when they are not.

Members of the public are advised not to participate in or promote any multi-level marketing scheme involving OneCoin or One Concept Pte Ltd. Promoters of the scheme involving OneCoin may be subjected to prosecution under the Multi-Level Marketing and Pyramid Selling (Prohibition) Act. Each charge carries a maximum imprisonment term of 5 years, and/or a maximum fine of $200,000 under the Multi-Level Marketing and Pyramid Selling (Prohibition) Act.

For further information on potential risks of digital tokens, which include cryptocurrencies and other forms of virtual currencies, you may visit these links for more information:

www.mas.gov.sg/News-and-Publications/Media-Releases/2017/Consumer-Advisory-on-Investment -Schemes-Involving-Digital-Tokens.aspx

https://www.moneysense.gov.sg/articles/2018/10/risks-of-cryptocurrencies-initial-coin-offerings-and-other-digital-tokens

Members of the public seeking financial services are strongly encouraged to deal only with persons regulated by MAS. You can refer to the Financial Institutions Directory at the MAS website (https://eservices.mas.gov.sg/fid) for an exhaustive list of financial institutions regulated by MAS, and the regulated activities they are authorised to provide. For more information on common unregulated schemes and dealing with unregulated entities, you may wish to review the resources available at https://www.moneysense.gov.sg/articles/2018/11/dealing-with-unregulated-persons.

Source: Singapore Police Force

Previous
Next