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The infamous Multi-Level-Marketing (MLM) scheme and so-called ‘cryptocurrency’ Onecoin is under investigation once again. On April 10 the German Federal Financial Supervisory Authority otherwise known as Bafin has frozen funds connected with a Onecoin payment processor.
German Regulator Bafin Freezes a Onecoin-Associated Company’s Assets
A German-based company called the IMS International Marketing Services Gmbh is under scrutiny for accepting funds coming from the Onecoin organization. In a recent report, the German regulatory agency Bafin reveals they have seized funds in excess of €29m from the IMS firm. The agency states that IMS raked in a total of €360m from the MLM based company Onecoin Ltd., for over a year.
Bafin says Onecoin is part of a vast network of marketing agencies selling virtual units the company declares as a cryptocurrency. The financial regulator says the Onecoin MLM scheme is used in Germany and across the world by many people. However, Bafin calls IMS an “unauthorized money remittance business,” and the company is in violation of sentence 4 of the German Payment Services Supervision Act.
“In its decree of 5 April 2017, BaFin ordered IMS International Marketing Services GmbH to immediately cease and wind down its unauthorized money remittance business with investors in “Onecoin” for Onecoin Ltd.,” explains the German supervisor’s office.
In case IMS should not abide by the order to cease business, Bafin threatened to impose a coercive fine of 1.5 million euros; for non-compliance with the winding-down order, it will also impose a coercive fine of 150,000 euros.
Investigations in Germany and All Over the World
Onecoin and its associated companies have been under investigation in Germany before. Bafin started investigating Onecoin in June of 2016 due to solicited investments through the German bank Commerzbank AG. The bank is the second largest financial institution in Germany and may have accepted unauthorized funds from the MLM organization in the past. Furthermore, the alleged Ponzi scheme has been frowned on by government authorities in Belgium, Nigeria, the UK’s Financial Conduct Authority (FCA), and many more countries.
Bafin says they don’t have the power to decide whether or not Onecoin tokens are valid under civil law. However, operations will be investigated says the regulatory agency and “orders may still be subject to judicial review.” Although they can’t legally define Onecoin’s business practices at the moment, Bafin can shut down unauthorized remittances.
“On behalf of Onecoin Ltd, IMS International Marketing Services had investors who had bid to buy “Onecoins” and transfer the sales to various accounts held by IMS International Marketing Services with different banks in Germany and forwarded the money on behalf of Onecoin Ltd to third parties, based in particular outside of Germany. This kind of financial service is classified as money remittance business,” Bafin’s report details.
What do you think about Bafin freezing a company’s assets with connections to Onecoin? Let us know in the comments below.
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