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The Central Bank of Portugal issues a warning against OneCoin

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The Central Bank of Portugal (BoP) recently joined a long list of authorities across the world who warned citizens about OneCoin, the so-called altcoin system widely regarded 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, respectively of Belize, Dubai and Bulgaria, are not, and are not have never been allowed to receive deposits or other repayable funds in the country. The warning applies that organizations act under their own name or through third parties under the names "Onecoin" and "Onelife".

The Financial Regulatory Authority added that these organizations are not allowed to carry out any financial activity under its supervision. Unlike prominent cryptocurrencies, OneCoin is not based on blockchain technology, making its claim to be a questionable cryptocurrency, as it has a centralized infrastructure and a discrete code.

The OneCoin operator has already stated to have a "single centralized model" with transactions recorded on a register that he manages. Instigating researchers have described OneCoin as a "pyramid system disguised as a new digital currency".

The scheme is not new in Portugal because the consumer protection organization DECO had already warned potential investors that OneCoin was not a cryptocurrency, but a pyramid scheme where recruiters were receiving new members money.

According to the organization, the promotion of OneCoin in the country comes mainly from Brazilian websites and Facebook pages announcing hotel meetings – the modus operandi of the pyramid scheme. One of these pages, targeting Portugal, Brazil and Spain, has nearly 15,000 subscribers and essentially publishes the content of a promoter.

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The promoter, who also uses YouTube, has a video called "OneCoin Ensures Success" in which he says that the number of coins in circulation is about to double, but adds that their value will not drop. In another video, he boasts of being in a different country every week thanks to the success he's got, but forgets to mention where the money comes from.

The warning from the Portuguese central bank comes at a time when bitcoin reaches a new record of $ 12,000. The soaring cryptocurrency has led a plethora of new investors to look for cryptocurrencies, some of which could potentially end up investing in OneCoin thinking about 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, citing a London police investigation into the project. Since then, financial regulators around the world are issuing warnings, and some have severely repressed the plan.

Image from Banco de Portugal by Flickr / Nelson Alexandre Rocha.