OneCoin Is Reduced in Germany by Regulators

Germany is one step behind as regulators usually are.

The country’s regulators have added to their OneCoin crackdown by issuing new cease and  desist orders.

This should not be the case. The German Federal Financial Supervisory Authority (BaFin) is passing judgement on One Coin without a trial.

This is one thing that is wrong about regulation generally. It acts based on its own authority and without larger judicial decisions.

In this case it has issued new cease-and-desist orders to holding companies connected to OneCoin – Onecoin Ltd, Dubai and OneLife Network Ltd – because it believes OneCoin is fraudulent.

It has ordered them to “dismantle their internet based ‘OneCoins’ trading system” and to “end all sales promotion activities” in Germany effective immediately.

OneCoin is an investment scheme centered around a purported digital currency, for which packages of “tokens” are sold that can later be exchanged. The operation has long been accused of operating a pyramid scheme, as participants are encouraged by advocates to find other buyers.

OneCoin has been around for a while, since at least the beginning of 2016, and is perhaps the second largest token  trading system now available. For German regulators to crack down on OneCoin now is – at least – is too little too late.

In fact, regulatory crackdowns are usually too late. Regulators are almost always slow, sometimes by months and sometimes by years.

“Buyer beware” is the best idea and is one that should be encouraged bur regulators won’t do that because it impedes their own authority.

In the case of Onecoin, no one that we know of has tried to bring them to trial or made the case that they are actually doing something that is criminal – and thus resulting in judicial action.

All that has happened is that regulatory authorities have exercised their own judgement without any formal, judicial input from Onecoin to penalize them.

At root and  heart this is what regulation is all about, the almost unlimited exercise of certain kinds of authority without a trial or any of the other accouterments of what passes for the West’s judicial systems.

If regulators want to penalize OneCoin, let them try to take it to a formal court rather than unilaterally imposing penalties on OneCoin that are systemically unwarranted.

 

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