The Australian Securities and Investment Commission (ASIC) warned the public in a notice released this week that it suspects OneCoin “could be involved in a scam,” according to a Cointelegraph report.
The warning is the starkest to date to come from the regulator concerning OneCoin, with potential investors advised to avoid dealing with the company. According to the regulator, OneCoin is operating on an unregulated basis and without a license in Australia.
Similar to ASIC’s previous warnings about other projects, the regulator said OneCoin failed to secure the two licenses required to legally offer investment services in the country. In order to operate legitimately, ASIC said the firm requires both an Australian Credit License and an Australian Financial Services License. According to a press release, the commission identified the company as being based in Sofia, Bulgaria.
Founded back in 2014, OneCoin has been labeled by some analysts as a classic Ponzi scheme. The company has reportedly raised US$3.8 million from investors by promising low-risk, high-reward investments.
While a senior official at the firm has been arrested in recent weeks, the company apparently continues to trade and was still live as of March.
Earlier this month, an investor in OneCoin brought legal proceedings against a number of people and entities linked to the project, which was described as fraudulent.
These include brother and sister team Ruja Ignatova and Konstantin Ignatov. Both face charges including wire fraud and money laundering. Konstantin Ignatov has already been arrested in connection with OneCoin. The suspects have denied allegations of operating a “hybrid Ponzi-pyramid scheme.”
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