The OneCoin cryptocurrency investment project has responded to the suggestion it is a Ponzi or pyramid scheme, arguing it does not fit the narrow definition of either.
In a report by Samoa Observer on May 14, the Central Bank of Samoa is quoted as saying last month that OneCoin is a “hybrid ponzi-pyramid scheme” which “laundered money through New Zealand to Samoa” and was targeting local residents through churches.
After the Observer reported the warning, it said it received a statement from OneCoin presenting its claims as to why it is neither Ponzi nor pyramid scheme.
It firstly offered up a definition of Ponzi schemes as arrangements where “revenue for old investors is generated through the investment of new investors.” It also said that, regarding legislation on pyramid schemes, “its origin and its express purpose is consumer protection.”
OneCoin makes the defense, therefore, that it, in fact, does not contractually require its agents, or Independent Marketing Associates (IMAs), to recruit other IMAs in order to earn their bonuses.
“IMAs’ success depends entirely on their personal commitment, abilities and effort. IMAs can obtain an educational package and can only receive a bonus for their marketing activity, meaning they are not obliged to incur any additional expenses or recruit a new IMA.”
Agents are not rewarded for the recruitment of new agents but for the “value of sales,” it adds.
OneCoin goes on to make the argument that because when IMAs join the scheme they sign a contract classifying them as “an independent, self-employed business owner,” they cannot be defined as consumers who are protected under general legislation.