Two men in Singapore have been charged over their involvement in promoting the fraudulent OneCoin cryptocurrency, according to local press reports.
In a landmark case for the city-state, the first of its kind to see charges brought for this type of offence, the men were alleged to have participated in the multi-level marketing scam based on a cryptocurrency token.
According to the Singapore Police Force, the arrests were made following intelligence from the Commercial Affairs Department, which had been working on investigating the case for several months.
In a statement, the police force said the scam roped in new participants with promotional tokens which could be used to mine for OneCoins, a practice which is expressly prohibited under pyramid selling laws.
According to the law enforcement authorities, “The promotional tokens could be used to ‘mine’ for OneCoins. Participants who brought in new participants were also entitled to overriding commissions in contravention of the Multi-Level Marketing and Pyramid Selling (Prohibition) Act.”
Deemed by the United States to be a fraudulent cryptocurrency, OneCoin was founded by a Bulgarian citizen Ruja Ignatova back in 2014. Enforcement action has already been brought in several jurisdictions, including New Zealand and the United States, where some arrests have already been made.
Ignatova’s brother Konstantin Ignatov was arrested in March at the Los Angeles International Airport, charged with the crime of wire fraud conspiracy. Ruja was charged with wire fraud, money laundering and securities fraud in absentia, since disappearing ahead of trial.
The latest arrests in Singapore are the first to take place in the country in connection with the fraud, which has spanned multiple countries on several different continents.
After investigations into the OneCoin scheme, the Monetary Authority of Singapore added it to its Investor Alert list, a published list of cryptocurrency firms the regulator believes to be dubious at best, fraudulent at worst.
As a result, investors are being encouraged to avoid OneCoin, or any other similar program which promotes wild returns using standard pyramid selling and MLM methods.
Their charges carry a custodial sentence of up to 5 years in prison, plus a fine of up to S$200,000 (US$147,800).
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