Becoming part of the cryptocurrency market as a provider of network services on blockchain and creator of a toke is … easy. Sounds surprising? This is, in fact, reality today. All that is required of a cryptocurrency initiative is for its creators to possess the required knowledge and technical abilities.
That is why it is not a surprise that Altcoin news announces the appearance of new market players on a daily basis. You have probably noticed that if you follow them closely. But some, unfortunately, like the OneCoin cryptocurrency, eventually get exposed as scam and schemes.
Apart from the requirement of skills and knowledge in this field, there is one single thing that can prevent people from creating their own crypto asset. And that’s money. Nowadays, tech start-ups are the ones who most actively participate in the processes of creating new networks with native currencies. More often than not, the lack of funding. This is how the practice of crowdfunding and ICOs began.
What is an ICO?
The abbreviation ICO stands for Initial Coin (or Currency) Offering. This is a type of crowdfunding initiative companies introduced in 2013. It is a way to raise capital for your cryptocurrency project. One of the most popular names in the industry, Ethereum, was also funded by an ICO. It is a popular practice that gained speed in 2017 and 2018. In its nature, this is a process of selling tokens of the new currency in exchange for legal tender or other cryptocurrencies, preferably Bitcoin. This exact nature of ICOs have turned them into a way to scam people and many have complained of malicious practices.
Similar is the case of the OneCoin scam. It is one of those that paid the price to join the industry by misleading and harmful means.
The OneCoin Project – too Good to be True
The OneCoin ecosystems and network were established in 2014. It claims to possess a blockchain network with a native cryptocurrency of the same name. It was announced that there are 120 billion units ready to be mined and released into circulation.
There’s even a claim that thanks to their visionary founder Dr. Ruja Ignatova, this cryptocurrency was the largest for 2016. Which is a far-fetched claim that cannot be backed by any proof. Bitcoin is and is going to remain the leader in the list of cryptocurrencies by market cap for a very long time. A worthy competitor has not been created yet, to topple the king from his throne.
Keep In Mind!
Authentic blockchain networks with native currencies offer something new, something beneficial to the market in terms of technology, coin application, and usage. Most cryptocurrency scams like the OneCoin scheme have nothing special to offer. You should learn as much as possible about any token before buying a share into it from an ICO or before investing funds to mine it. If it has no special characteristics, it won’t bring value to the markets, it won’t have additional value for the development of technology, and all of this means that it won’t work as a way to store value. In other words, ordinary or random cryptocurrencies are worthless unless perceived otherwise by the global community.
But the scammers behind the initiative did not stop there. They even introduced the so-called XcoinX cryptocurrency exchange for their clients. It was the only place that allowed for the trading of ONE tokens, no other exchange was willing to list them. Of course, the exchange is no longer operating.
How Everything Around OneCoin Unraveled?
There were persistent rumors about the shady dealings and practices of this initiative. Long before it was actually exposed as a scam and a pyramid. This stemmed from its whole model of operations. But people turned a blind eye to the problems for a long time because it seemed like the next exciting opportunity.
But to understand why this is a scam initiative, we must understand how it worked. OneCoin tokens could be acquired only through the purchase of so-called ‘educational packages’. Their price ranged for merely €100 to the staggering €118K or more. The amount of tokens you could receive greatly varied. At that time, the OneCoin price was just a mere fraction of the Bitcoin’s and people rushed to buy as much as possible and acquire as many tokens as possible to generate returns.
In fact, the profits of the users were generated from the further purchase of packages on part of new clients. Just like a financial pyramid works. So when people started to doubt the integrity of the initiative, the constant influx of funds gradually dried out and people stopped receiving financial benefits.
From then on out, everything went down the expected path. The company was put under review. Their Bulgarian headquarters were raided by the police and huge amounts of tech and documents were seized. The fate of Ruja Ignatova is still undecided and unclear. But the court saga is far from over.
Were the Educational Materials Any Good?
You would think that if these materials were good enough and could truly provide the education needed to succeed, the harm done would not be that big. According to the available information, the overpriced packages would include:
- ● General guidance on cryptocurrencies;
- ● Basic education about trading and finances;
- ● Analyses of the current trading environment;
- ● Global financial trends & investment analyses;
- ● Asset Management;
- ● Risk Control.
Unfortunately, investigations into the OneCoin materials showed one very disturbing thing. Most of them were plagiarized from reputable companies and platforms that truly want to provide quality when it comes to cryptocurrency knowledge. The rest were predominantly filled with very basic information that has been marked by the promotional efforts of the crypto’s owners.
In other words, nothing that these people used to sell could provide value for their customers. It was a financial funnel that was gradually and patiently gathering funds from people. Without actually giving anything of value in return.
The only reason why this crypto coin project lived for as long as it did was Ruja Ignatova herself. Allegedly, she is an Oxford graduate and has a Doctorate Degree in Law. That makes her suitable for crafting schemes that can exploit loopholes in legislation, both on a local and global scale. If she even graduated from there, there is no actual evidence of that!
Don’t Let the Craze Put You In a Haze!
Cryptocurrencies are a very exciting topic, it is understandable. This is a very lucrative field that has generated unimaginable returns for those who know how to work it.
Unfortunately, scammers take advantage of this craze around crypto and abuse people’s interest and excitement. Just like the OneCoin scam did to so many investors.
Stay always vigilant. Scams hide huge risks for your investments and can lead to you incurring significant losses. Often such that you cannot recover from. Of course, you should not be discouraged by the presence of scams. There have always been and there will always be.
It is up to you to make your research and keep yourself safe. You don’t have to pay the OneCoin price to participate in the industry. There are safe choices you can make if you just keep a clear mind when entering the field.
Hello, I am Collin Tyusm. I am a Forex blogger. I have created my blog, because I want to help people learn more about Forex & CFD Trading Software and Bots.