Two men were charged in Singapore today for promoting a cryptocurrency-based multi-level marketing scheme. Local police believe this is the first case of its kind in the country.
The perpetrators in question had been promoting the notorious multi-billion dollar pyramid scheme OneCoin, Channel News Asia reports.
One of the men was also charged with running a company called One Concept Pte Ltd set up to promote the scheme.
Singapore residents that took part in the scheme were sold educational courses and promotional tokens. The scammers claimed the tokens could then be redeemed to “mine” OneCoin. In reality, the tokens couldn’t be redeemed for anything.
The 💜 of EU tech
The latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!
Those who bought into the scheme were encouraged to promote it with other incentives and commissions.
According to local police, OneCoin’s promotional structure contravened the Multi-Level Marketing and Pyramid Selling (Prohibition) Act. Each of the perpetrators could face up to five years in prison and a maximum fine of S$200,000 ($147,000).
The Monetary Authority of Singapore (MAS) has listed both OneCoin and One Concept Pte Ltd, along with a host of other related organizations, on its investor alert list.
Back in March, those at the top of the pyramid, Konstantin Ignatov and Ruja Ignatova were apprehended at Los Angeles International Airport for their role in the international scam.
Ignatova, was charged with securities fraud, wire fraud, and money laundering. Ignatov was arrested on grounds of conspiracy to commit wire fraud.
As is the case with pyramid schemes, investors were promised greater returns for every additional investor they brought to the scheme. However, the scheme was an entire sham, and none of the “cryptocurrency technology” OneCoin claimed to operate actually existed.
Despite all the red flags and being nearly identical to the infamous BitConnect scam, OneCoin has still been able to defraud investors for over $3 billion.
Did you know? Hard Fork has its own stage at TNW2019, our tech conference in Amsterdam. Check it out.
Get the TNW newsletter
Get the most important tech news in your inbox each week.