Onecoin aftermath: a Chinese recently-exonerated man swindled out of 1m yuan
Chen Man, who has been put into jail for 23 years until this month because of a wrongful conviction of a murder and arson case, has been in the spotlight again as his national compensation of 1m RMB has been swindled in his Onecard investment. What happened to Chen has triggered heated discussion on how should society accept people out of jail and, how schemes related “digital currency” are incurring great losses to ordinary and even vulnerable people.
The day Mr. Chen has been released after 23 years of wrongful prison life. No more his smile as Onecoin makes him lose 1 million RMB
The lawyer of Chen Man posted the Chen Man’s situation of being swindled on a social media by saying that
“Chen told me that his ongoing investment called Onecoin, which he believes as the largest cryptocurrency only next to Bitcoin, can gain him a 9x return in one year. However I do think the so called Onecoin is a Ponzi scheme. I am considering to call the police for him”
An investigative reporter from RedStar, a local press, tried to interview the company selling Onecoin to Mr. Chen but has been denied as the manager claimed that its company only selling products on WeChat (a Chinese instant messaging software).
According to an industry insider unwilling to be disclosed, Onecoin’s buisness mode is a typical Pyramid scheme. He said:
“There are two modes for Onecoin investor to gain profits. One is static strategy and the other is dynamic one. Static one refers to the strategy that one waits for the future earning based on previous investment, which is very slow and unattractive. Dynamic one refers to a program that investors is promised to gain “consistent” returns by using money from new investors to pay off earlier investors. There are two types of people that will invest in Onecoin. One is those who have been brainwashed and thus be swindled out of money. The other type is those who willingly defraud subsequent investors as they have to earn their money back.”
In Mr. Chen’s case, 60% of his 1milllion will have been directly handed to previous investors and his profits will rely on the number of his subsequent investors otherwise the fund chain will break down right away. It is only when Chen’s lawyer disclosed the situation that Mr. Chen began to believe that he has been involved in a Pyramid scheme.
Onecoin has been recognized as a scam in the cryptocurrency community both of China and abroad. But for ordinary people in China, Onecoin is really beguiling and luring as Onecoin team claims its “currency is comparable with Bitcoin on the backdrop that Bitcoin’s price is voraciously bounding back after a slump due to Chinese official regulation on Bitcoin exchanges. Chen’s case really matters as he has been labelled as the hallmark of Chinese judicial and legal progress for the overturn of his unjustified case 23 years ago. Now the money government compensated him for his miserable past has been swindled by a currency seemingly-related to Bitcoin, the society, not fully acceptable of Bitcoin at present, will cast doubt on cryptocurrency as whole with Bitcoin borne the brunt as the scapegoat. One comment on the news said:
Bitcoin is actually not very different from Onecoin. It is popular and valuable now only because it is hyped.Now Bitcoin has a big market value so people will think its ups and downs are normal…Bitcoin will die eventually.
A comment of the Chinese news on Mr.Chen’s situation, criticizing Bitcoin as a scam, too. There are 39 upvotes for it.
The masses in China still have limited understanding of Bitcoin. Most of people concern Bitcoin only as speculators. However,the fact Bitcoin’s price volatility and scams in the name of Bitcoin like Onecoin tend to bring financial and social instability has alerted the government(see article). Though Onecoin has the least link with Bitcoin, its existence will still be a hindrance to the public acceptance of Bitcoin and crytocurrency. Now the scam of Onecoin is relevant to Mr. Chen, a vulnerable figure attracted much attention, the aftermath of the case can only be cleared fundamentally in the when the government confirms Bitcoin’s legal status or Bitcoin’s underlying technology brings concrete benefits to the society.