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Portugal’s Central Bank Issues Warning Against OneCoin

Last Updated March 4, 2021 5:02 PM
Francisco Memoria
Last Updated March 4, 2021 5:02 PM

The Banco de Portugal (BdP), Portugal’s central bank, recently joined a long list of authorities around the world that warned its citizens on OneCoin, the purported altcoin scheme widely seen as a scam.

In the warning , the country’s central bank revealed that three organizations, OneCoin Network Limited, OneCoin Limited, and One Network Services Ltd, from Belize, Dubai, and Bulgaria respectively, aren’t, and have never been, allowed to receive deposits or other repayable funds in the country. The warning applies whether the organizations are acting under their own name or through third parties under the names “Onecoin” and “Onelife.”

The financial regulator added that these organizations aren’t allowed to perform any financial activity under its supervision. Unlike prominent cryptocurrencies, OneCoin isn’t based on blockchain technology, which makes its claim of being a cryptocurrency questionable, as it has a centralized infrastructure and discreet code.

OneCoin’s operator has previously stated that it has a “unique centralized model” with transactions recorded on a ledger that it manages. Instigative researchers labeled OneCoin a “pyramid scheme disguised as a new digital currency.”

The scheme isn’t new in Portugal, as consumer protection organization DECO had already warned  potential investors that OneCoin is not a cryptocurrency, but a pyramid scheme where recruiters receive money from new members.

Per the organization, OneCoin promotion in the country has mostly come from Brazilian websites and Facebook pages advertising hotel meetings – the pyramid scheme’s modus operandi. One such page , targeting Portugal, Brazil, and Spain, has nearly 15,000 followers and essentially publishes a promoter’s content.

The promoter, which also uses YouTube, has a video titled “OneCoin guaranteed success ,” in which he claims the number of coins in circulation is about to double but adds that their value won’t go down. In another video, he boasts of being in a different country every single week thanks to the success he’s achieved but neglects to mention where the money comes from.

Portugal’s central bank warning comes at a time in which bitcoin hits a new all-time high eyeing $12,000. The cryptocurrency’s surge has led a plethora of new investors to research cryptocurrencies, some of which could potentially end up investing in OneCoin thinking they were entering the cryptocurrency ecosystem.

In Europe, the Belgian Financial Services and Markets Authority was among the first regulators to issue a warning against OneCoin, in mid-2016. Months later, the UK’s Financial Conduct Authority issued its own warning, pointing to an investigation by the City of London Police into the scheme. Since then, financial regulators throughout the world have been issuing warnings, with some cracking down on the scheme.

Banco de Portugal image from Flickr/Nelson Alexandre Rocha .