OneCoin's latest defense is a masterclass in legal gymnastics: the company isn't running a Ponzi scheme, it claims, because it only scammed its own salespeople, not everyday consumers.
The company calls these salespeople Independent Marketing Associates, or IMAs. Here's how the scheme works. IMAs pump money into OneCoin to buy digital points. OneCoin itself decides what those points are worth. Until January 2017, IMAs could cash out their investments. The company paid those withdrawal requests with money from new recruits pouring in behind them. That's textbook Ponzi mechanics. The whole operation still runs on recruiting new IMAs to pay off old ones.
But OneCoin has a new angle. Since there are no retail customers involved—only IMAs—the company argues it can't be a Ponzi pyramid scheme. The company made this argument directly to the Samoan Central Bank after regulators declared OneCoin a Ponzi-pyramid hybrid. OneCoin told the Samoa Observer that pyramid scheme laws exist to protect consumers. The IMAs, the company insisted, aren't consumers. They're self-employed business owners.
No country with laws against pyramid schemes has ever carved out an exemption for ripping off your own distributors instead of the general public. OneCoin seems to believe one should exist.
The company also dusted off another tired excuse: it claims no one authorized to represent OneCoin even exists in Samoa or New Zealand. Therefore, it says, authorities in those countries have no jurisdiction. OneCoin has wheeled out this argument in every jurisdiction that has come after it. It hasn't worked anywhere.
The legal reality is blunt. Any country on Earth can investigate and prosecute a Ponzi-pyramid scheme regardless of where its executives sit. Geography doesn't shield criminal enterprise from law enforcement.
This all matters because OneCoin's co-founder Konstantin Ignatov is currently facing trial in US federal court. The same absurd defenses the company has been floating—that it only scammed its salespeople, that it doesn't operate where authorities claim it does—will get torn apart by prosecutors and judges. Ignatov's legal team seems likely to recycle the same failed arguments in front of a jury.
The irony is hard to miss. OneCoin has spent years insisting it's something other than what the evidence clearly shows it is. The coming trial could finally end that charade once and for all, and do it in front of the world's attention. If OneCoin wants to provide a clinic in how not to defend a Ponzi scheme, the US courtroom is the perfect stage.
🤖 Quick Answer
What is OneCoin's defense against Ponzi scheme accusations?OneCoin argues it cannot be classified as a Ponzi scheme because it exclusively operates with Independent Marketing Associates (IMAs) rather than retail consumers. The company claims that since only salespeople invest in digital points—not general public customers—traditional Ponzi pyramid scheme definitions do not apply to its business model.
How does OneCoin's payment system operate?
IMAs invest capital to purchase digital points whose value is determined solely by OneCoin. Until January 2017, participants could withdraw investments, with the company funding redemptions using capital from newly recruited IMAs. This sequential payment structure mirrors classic Ponzi mechanics, where earlier investors receive compensation from subsequent recruits' contributions.
What sustains OneCoin's recruitment-based model?
The entire operation perpetually relies on recruiting new Independent Marketing Associates to generate incoming capital necessary for compensating existing participants.
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