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German financial regulator freezes accounts of OneCoin payment processor
Germany’s Federal Financial Supervisory Authority (BaFin) last week announced that it was freezing the bank accounts of IMS International Marketing Services GmbH, a German limited liability company based in the city of Greven.
“In its decree of 5 April 2017, BaFin ordered IMS International Marketing Services GmbH to immediately cease and wind down its unauthorized money remittance business with investors in “OneCoin” for Onecoin Ltd, Dubai”, BaFin said. “In case IMS should not abide by the order to cease business, BaFin threatened to impose a coercive fine of 1.5 million euros; for non-compliance with the winding-down order, it would impose a coercive fine of 150,000 euros.”
Financial watchdogs, including UK’s Financial Conduct Authority (FCA), Belgium’s Financial Services and Markets Authority (FSMA), have issued warning again OneCoin in the recent past.
BaFin explained that Onecoin Ltd, under the “OneCoin” brand, uses a multi-level marketing structure both globally and in Germany. The services offered by IMS International Marketing Services GmbH to Onecoin are classified as money remittance business, which requires prior authorization by BaFin. The regulator stated that the firm did not and does not have the required authorization.
“Between December 2015 and December 2016, IMS International Marketing Services GmbH took in, in total, approximately 360 million euros on behalf of Onecoin Ltd. Approximately 29 million euros of this remains in the currently frozen accounts”, it said.
BaFin said that it has ordered IMS International Marketing Services GmbH to transfer the remaining bank deposits back to the investors who had made payments to it most recently, where the bank deposits are not subject to a garnishment.
“BaFin does not have the right to decide as to the validity under civil law of the “OneCoins” sales contracts. It may therefore not answer questions of this nature”, it added.