Uganda’s central bank is warning local residents about Onecoin, a digital currency scheme widely accused of being a scam.
The Bank of Uganda published an advisory earlier today which called for consumers to be mindful of the risks of investing in digital currencies. Specifically, the notice highlights the creation of a company called “One Coin Digital Money” that has set up shop in Kampala.
According to the central bank, “whoever deals with ‘ONE COIN DIGITAL MONEY’ does so at his or her own risk”.
The notice goes on to explain:
“The company is still in its formative stages but it is aggressively encouraging members to buy digital money and promising very high returns and rewards on [a] ‘first-come-first-served’ basis.”
Onecoin is a multi-level marketing (MLM) system, through which prospective investors buy packages of “tokens” that can be redeemed on a platform said to act as a hub for mining, or the process by which new transactions are added to a blockchain. In a hallmark of the pyramid scheme concept, Onecoin also teases major financial gains for those who can recruit others to invest – a characteristic that has sparked criticism and accusations of being a scam.
The warning represents the latest scrutiny directed toward Onecoin, which has drawn the ire of regulators across Europe, also sparking an investigation by the London police. Nigeria’s central bank issued a similar warning last month, and today’s missive indicates that financial overseers in Africa are looking at Onecoin more closely.
In addition to Onecoin, the document names bitcoin, XRP, peercoin, namecoin, dogecoin, litecoin, bytecoin, primecoin, and blackcoin as other examples.
The move also comes as regulators and academics in Uganda have set the stage for developing virtual currency regulations.
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