The Belgian Financial Services and Markets Authority has issued a warning about a lesser-known altcoin called OneCoin, to the effect that certain OneCoin promoters are ...
The Belgian Financial Services and Markets Authority has issued a warning about a lesser-known altcoin called OneCoin, to the effect that certain OneCoin promoters are lying about their recognition and relationship with the Belgian authority.
A press briefing published on their website reads, in part:
Certain people have recently been promoting OneCoin, said to be a virtual currency based on cryptography, in Belgium. The FSMA wishes to warn the public that OneCoin has not received any form of recognition whatsoever from the FSMA. The same is true of the persons who are promoting OneCoin: they do not hold an authorization or any other form of recognition from the FSMA. Generally speaking, there are no specific rules governing virtual money that the FSMA could enforce.
The FSMA didn’t stop there, of course, but went on to in so many words indict all cryptocurrencies, Bitcoin included, as “risky,” saying:
The FSMA wishes to remind the public of its warnings, issued jointly with the National Bank of Belgium (NBB) in January 2014 and in April 2015, and emphasizes that the risks associated with the use and the holding of virtual money such as Bitcoin which are mentioned in that warning are still relevant.
While the briefing is overall vague about at which point OneCoin has claimed to have recognition from the FSMA or any other regulatory agency, it is, however, undeniable that the coin’s creators and promoters are “pro-regulation.” From their website, one gets a sense that they want to be seen as a coin which will make regulation easier. It is important to keep in mind that regulation entails seizure, the difficulty of which with Bitcoin is seen as a positive feature for much of the community and user base.
Regulatory challenges related to cryptocurrencies are mainly linked to the anonymity of transactions and the decentralization of financial dealings. The authorities’ goal is to prevent the possibility of using cryptocurrencies as a means for criminal activity. […] Considering the fact that each cryptocurrency has unique traits, we believe that OneCoin and every other cryptocurrency on the market should be assessed by regulators based on its unique traits. […]
To prevent individuals from engaging in criminal and unwanted behavior, OneCoin monitors its clients and implements rules aligned with the legal development. For example, to prevent money laundering, identity theft, financial fraud and terrorist financing, OneCoin has implemented KYC (know-your-customer) rules, thus disrupting any possible misconduct by its users.
It should be said that OneCoin is not the first to do such things. GreenCoinX (CCN.com coverage), which requires (or, should we say “required,” since their website seems to be down and the coin may well be defunct) registration with full name and SMS verification, comes to mind.
Nevertheless, efforts such as OneCoin may actually have some validity in the future. As companies begin to explore international currencies, those that make it easier to comply with regulators than Bitcoin may become more attractive. At the same time, the route taken by Ripple, wherein transactions were able to be reversed, may end up being a dead-end. After all, there are myriad ways to transact which allow transactions to be reversed, and there is no innovation to be had there. Part of the reason that the Bitcoin network is so much cheaper to transact on than others is that it does not require a massive staff in the way that Paypal, Western Union, and other remittance providers do. Instead, the user is responsible for their transactions in the same way that they are with their cash. While it’s not for everyone, it could certainly be argued that it is the nature of the thing.
However you look at it, the attempt by OneCoin to cozy up with regulators by designing a coin which can be “monitored” and publishing pro-regulatory messages on their website has backfired in this instance, and readers should be aware that any claims by OneCoin promoters to be recognized or approved by the Belgian FSMA are, in fact, fraudulent claims. Ripple experienced a similar situation when they were fined $700,000 by the SEC for non-compliance after gaining wide unpopularity for their own pro-regulation moves.
Featured image from Shutterstock.