Uganda's central bank warns of OneCoin scam, banning all digital currencies

The Central Bank of Uganda (BoU) has joined regulators around the world in warning the public about the Onecoin altcoin scam.

The Central Bank of Uganda clearly pointed out in the announcement that the "OneCoin Digital Currency" organization was not authorized by the authorities, and there is very little information about the organization. It is only known that its company address is near Kampala, the capital of Uganda.

Unlike some other well-known cryptocurrencies, the OneCoin system is not built on a public ledger. In addition, given its centralized architecture and crude code design, OneCoin's claim to be a cryptocurrency is problematic. The head of OneCoin once said that they operate in a "unique centralized model" where all transactions are recorded in a ledger that is managed by the organization. Researchers have long defined OneCoin as a "Ponzi scheme disguised as a new digital currency."

As the scam has just entered Uganda, the central bank has warned the public that companies and operators involved in OneCoin businesses will "actively encourage members to buy the digital currency and promise high returns and high rewards on a 'first come, first served' basis."

The country's sole monetary authority put it bluntly:

The central bank hereby reminds the general public that anyone who insists on trading in the 'OneCoin digital currency' must do so at their own risk.

The central bank also warned against investing in digital currencies, including OneCoin, Bitcoin, Ripple, Peercoin, Namecoin, Dogecoin, Litecoin, Bytecoin, primecoin, Blackcoin and any other form of digital currency.

The Ugandan government and researchers are planning to regulate Bitcoin, a move that could make Uganda the first country in East Africa to regulate cryptocurrencies.

In addition to Uganda, Nigeria is another country that has issued an official warning about OneCoin. In Europe, the Belgian Financial Services and Markets Authority was the first country to warn about the OneCoin scam. Subsequently, the UK Financial Conduct Authority (FCA) issued the same announcement, pointing out that after an investigation by the London police, OneCoin was confirmed to be a pyramid scheme.