Bank of Uganda has warned Ugandans not to deal with One Coin Digital Money. The regulator of financial services says, the entity is not licensed to carry out any financial services in Uganda.
The central Bank in a statement revealed that One Coin is ‘ ‘ still in formative stages, but it is aggressively encouraging members to buy digital money and promising very high returns and rewards on first-come, first served basis’’
‘ ‘ Whoever wishes to invest their hard earned savings in cryptocurrency forms such as One Coin, Bitcoin, Ripple Coin, Peer Coin, Name Coin, Dege Coin, Lite Coin, Byte Coin, Prime Coin, Black Coin, or another forms of Digital currency, is taking a risk in the financial space, where there is neither investor protection nor regulatory purview’’ the bank observed.
Bank warned that whoever deals with ‘‘Coin Digital does so at their own risk’’
The public is encouraged to do business transactions with only licensed financial institutions
Onecoin is considered a ponzi scheme because of the history of the people central to its creation and operation
What is a ponzi scheme?
A Ponzi scheme is a fraudulent investing scam promising high rates of return with little risk to investors. Money invested by clients is not invested in any legitimate business but used to pay the people operating the scheme as well as those who invested earlier on.
Signs of ponzi scheme
Some signs that an investment may be a Ponzi scheme
1. It guarantees you high returns with little risk of losing your investment. A good general rule to follow is; if it sounds too good to be true, then it is false.
2. It promises you consistent returns regardless of the market conditions. Legitimate businesses usually experience times of profit and times of loss.
3. The investment strategy or business activities are described as too complex for investors to understand, or top secret. If a business idea cannot be explained, it is suspicious.
4. The company or proprietor running the scheme focuses all their energy into attracting new clients to make investments. Without a constant flow of new investments to continue to provide returns to the scheme owners and older investors, the scheme falls apart.
5. Both old and new clients face difficulty trying to remove their money from the scheme. Many times, it has already been spent on paying the proprietors or other investors.