ITALY Case Analyzed

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Igorkrnic
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ITALY Case Analyzed

Post by Igorkrnic » Wed Jul 19, 2017 6:10 pm

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In this topic, I will address the hater's famous topic: The Italy case. What actually happened there?
To answer this, we will not read or quote haters OPINIONS, we will quote and read original government documents.

This all started with this verdict from THE COMPETITION AND MARKETING AUTHORITY dated December 21, 2016.
Original document in Italian can be found here or here and I made English translation of it here.

I will quote here the key paragraphs so we can actually see what is going on:
November 2016, aimed at verifying the existence of commercial practices In breach of Articles 20, 21 (1) (b), (c), 23 Paragraph 1, letter p), art. 49, paragraph 1, letter a), b), c), d), g), h), q), r), v and e art. 66 of the Consumer Code, by ONE NETWORK SERVICES LTD.
Active in the promotion and dissemination sector Criptomoneta named OneCoin,
by Mr. Christian Leitner, Registrar of the Site onecoinsuedtirol.it,
of Mr. Antonio Guida, site registrar onecoinitaliaofficial.it.
And of Mr. Stefano Tagliapietra, registrar of the site onecoinitalia.com .;
So, they were investigating commercial practices of ONE NETWORK SERVICES LTD conducted by those 3 guys via their own web sites. Onelife.eu and Onecoin.eu were not mentioned although complete Terms of Service and Compliances can be found there to see if those 3 guys are doing it according to the company rules. But let's put compliance aside cause authority indeed needs to investigate what are those guys doing.
At least from March 2016 and variously, promoted - through Internet, the e-book promotional "Earn with OneCoin" 1 And specials Events - adhering to a shopping program and disseminating criptomoneta2 OneCoin, coupled with "training kit" linked to it (by Followed by the Program), with a significant return for consumers Economic via different paths. In particular, it comes Highlighted how one can purchase the OneCoin Criptomoneta Just wait to wait for it to increase its value through an always Greater spread.
Ok so again they were promoting the selling of Onecoin cryptocurrency, not Education products and of course, they seem to incentivize buyers to join cause they were promising high returns and told users just to wait for the price to go up and profit from selling Onecoins.
From documentation to acts3 It turns out that a basic investment in the Program of € 140.00 correspond to 1,000 tokens and that, according to A procedure called split - whose details are not specified - Can be doubled to 2,000. At this point it is possible Convert the matured tokens by dividing their amount for a parameter "Difficulty" equal to 70 (also not specified) and thus obtaining 28 Onecoin. After doing this, the currency conversion value Virtual and euro is 1 OneCoin = € 5.63 so the 28 OneCoins matured Would amount to € 157. Then, the exchange rate It would grow, always according to unspecified parameters, until reaching, in 2018, the conversion rate of 1 Onecoin = € 100 and therefore the 28 onecoins Initials would amount to € 2.8004
Here we see that those 3 guys educated people that a basic INVESTMENT (wrong) was 140eur, mentioning tokens, split and difficulty but not explaining that they got all those for free and what does any of it mean. They also seem to promise people Onecoin value of 100 eur in this ebook thus tricking people thay can make 28000 euro out of 140 eur investment. This is so wrong. We all know that once Onecoin hits public trading no one can say where the value will go or how fast you will be able to sell coins or will you be able to sell them. But we see that usability is the main focus.
Those 3 guys scammed people.
10. Collected evidence did not allow to ascertain what the When the consumer who has joined the system can proceed To convert the OneCoins earned through the described Euro channels. TO For this, the professional refers to jobs only inside Of the One Exchange proprietary platform.
11. It follows from the foregoing that the behaviors object of Controversy as "business practices" consist in providing one Incomplete, not transparent and unrealistic representation7
:
Correct. In this IMA ebook, users were promised high profit from Onecoins but they were not told that Onecoin is private and can not be sold to the public, it could only be sold on the internal exchange that was online back then. Indeed this is false marketing.
(I) the terms and conditions of the Program proposed to consumers, to The actual nature of the commitments that the consumer assumes by subscribing Joining the OneCoin system,
(Ii) the real chance of earning gains by adhering to the schema Proposed by the professional,
(Iii) the actual conversion possibilities of the OneCoin criptomoneta, such To mislead the average consumer by making a decision Of a commercial nature that otherwise would not have taken.
12. In addition, specifically with regard to the promotion of the OneCoin crypto Moneta and the associated packet-training it results That the most substantial part of the revenue that can be achieved by the activity promoted By professionals comes not only from buying virtual money in Rather than paying the shares that consumers are Called to pay at the time of accession to the system, which in turn To reach the goal seem to be required to recruit others Consumers - who are thus in the same condition - Generating significant revenue for One Network Services Ltd .; These modes, which appear to reproduce the typical dynamics of Pyramid sales.
Ok so based on those custom IMA ebooks that are proposed to users they were promised to earn money if they join Onecoin and they were misled to think they will be able to sell and profit fast from cryptocurrency.
But seems like MLM part was promoted to look like you can only earn money by recruiting other people. And authorities remark that models appear in pyramid sales. I have deeply analyzed how Onelife actually works, that you can earn money without recruiting people and you can read it here.
13. Following the notice of initiation of the 28th November 2016, with reference to the precautionary procedure, were Produced defensive memories by One Network Services Ltd. on June 6 December 2016, and by Mr Stefano Tagliapietra, registrar of the site onecoinitalia.com. On December 13, 2016: the latter also carried out Access to documents on December 2, 2016.
So since their promotional material is pretty unfair to consumers (although Onelife can not have consumers according to ToS) memos were sent to Onelife Ltd and those 3 guys that made all this mess.
14. The company One Network Services Ltd. has previously alleged that The startup text should have been transmitted Bulgarian language in accordance with the provisions of the Convention of Rights Humans (New York, 1966) and the principles expressed in the Council judgment Of State No. 2345 of 19 April 2000. According to the party, the terms should Start from the moment the text of the startup is transmitted in Bulgarian.
Since Onelife is global MLM company working in 194 countries, imagine some IMAs make such mess in each country and they all send memos in their native language. So the company asked that memo to be translated into Bulgarian.
15. On the merits of the reliefs, the professional has shown that he is an entity Separate, only responsible for providing support services Administrative according to the attached convention, with respect to companies OneCoin Ltd. (promoter of criptomoneta) and OneLife Network Ltd (Owner of the sales and selling system of training courses).
16. As regards the operation of the cryptomotor, the part indicated that you are It would treat a legal product both in terms of legislative discipline Italian as regards the European one. As the first highlights Even that the activity in question would not be attributable to that forbidden From L.173 / 2005 but it would be a legal system. Finally, the company said it would be strange with respect to Italian sites in Which would have nothing to report.
Google translate is not so perfect so I asked around here. Seems like those guys explained to authorities that they were Independent Marketing Associates and are not legally linked to the Onelife and Onecoin companies meaning their misleading promotional material is not endorsed by the company but rather by them selves.
As for cryptocurrency, it is not being sold by the company, it is a legal private product in making. There are many of them out there too.
Also, they explained their website are not linked with Onelife Ltd company.
17. As for Mr Stefano Tagliapietra, in defensive memory he has Highlighted to be alien to the promotion and dissemination of Criptomoneta in question. From this he descends out of his Involvement in the proceedings would have been the result of an error from the Which would only be "the head of an information website On criptovalute ", prudentially offline" and not [could] Certainly to be considered a reference professional of One Coin Network Services Ltd ".
One of them responded with a memo stating he was a stranger when comes to promoting Onecoin cryptocurrency and while his website was offline then, he said it was a mistake and that website had no link to the Onelife company. Seems like he is trying to bail his ass and at the same time not to lie against Onlife company cause they can prove his lie.
III. ASSESSMENTS
18. Preliminary Exceptions as One Network appear to be of no value Services Ltd. is the professional listed repeatedly on the Site and documentation of the proceedings, documents in Italian and diffused To Italian consumers.
19. It is therefore apparent that the statement of the Party concerning the assertion The Authority's obligation to provide the text of the start-up message Bulgarian language, in accordance with Article 14, paragraph 3, letter a) of the Pact International civil and political rights and the principles of the Judgment of the State Council No. 2345/2000 is groundless since As in the present case the failure to translate the communication The initiation of proceedings in the language of the recipient can not It is considered that the right to defense has been affected.
21. Finally, the professional operates in Italy by proposing to join the system The subject of the procedure to Italian consumers through drafted sites Entirely in Italian language and after the launch of the However, the procedure has replied in a precise way to the motion censures Demonstrating that he understands the contents well and can do it Defended in a complete, organic and conferring manner.
Ok, what do we see here? Authority refused to send a memo to Onelife in the Bulgarian language cause all the misleading promotional material was made on pure Italian language and spread to Italian people. So seems like they will make their verdict without Onlife company response, without checking compliance rules at their web sites. Seems like dr Ruja learned a lesson here.
Such elements as to reinforce the need to provide particular urgency In order to prevent the commercial practice described above, continue to Be put into practice in the merits of merit; HAS Pursuant to art. 27, paragraph 3, of the Consumption Code and Art. 8, paragraph 3 of the Rules of Procedure, that ONE NETWORK SERVICES LTD Mr. Christian Leitner, Registrar of the site onecoinsuedtirol.it, Mr. Antonio Guide, site registrars onecoinitaliaofficial.it .:
(A) suspend any activity directed at the promotion and dissemination of OneCoin criptomoneta and associated training packs;
(B) communicate to the Authority the implementation of this Agreement Suspension order and its modalities within ten days from the Receipt of this measure by sending a detailed report Which outlines the measures taken. According to art. 27, paragraph 12 of the Consumption Code, in the case of In breach of this resolution, the Authority shall apply the sanction Pecuniary administration from 10,000 to 5,000,000 euros. In cases of repetition In default, the Authority may suspend the business activity For a period not exceeding thirty days. This measure will be communicated to the interested parties and Published in the Bulletin of the Competition Authority and of the Market.
Christian Leitner, Antonio Guide (seems like the third guy Stefano Tagliapietra managed to bail out) and ONE NETWORK SERVICES LTD, although they were falsely selling against the rules of the company, were ordered to suspend activity of promoting and selling onecoin cryptocurrency and education packs and if they continue they could face a fine from 10000 euro to 5 million euro.

CONCLUSION:
We can clearly see that at that time there was no communication between Onelife company and Italian authority so the verdict was made just for Christian Leitner and Antonio Guide who promoted Onelife and we can see from their promotions they were doing it WRONG.


Since there was still no communication between Onelife company and Italian authority, probably because dr Ruja did not think that this case was so important cause it is clear error from IMAs, and the rest of IMAs in Italy probably continued business but maybe in compliance, not like those leaders did it, Italian authority decided to issue another order in February 2017. that can be originally found here.
The Antitrust, after extending to the company One Life Network Ltd. and Easy Life Srl the procedure relating to the promotion of criptomoneta OneCoin, has ordered the precautionary suspension of the above mentioned activities by the One Life society. Easy Life Srl has instead announced that it has proceeded to the interruption of the practice
This order clearly states that it is just a precautionary suspension of Onelife activities in whole Italy for Onelife network.
This is probably where Onlife company closed registrations for Italy and started talking to the authorities to solve this issue as we heard from dr Ruja on the recent Webinar.
dr Ruja:
We as a company are aware and we are speaking with all regulatory bodies in Europe.
This is what is extremely important to us and we are really focus into education of the market and some of the leaders oversell, are too aggressive and again, we as a company do not tolerate people who are over selling or selling this opportunity on the wrong way.

So in situation in Germany and Italy again summarizing, we are on this, we are monitoring this very carefully, but I also would like leaders to be very responsible, and as I said, compliance is punishing people who act as they shouldn't and also you guys in the network, please take care of your people because they just damage them selves, you, all your members.
Looks to me as those Onelife IMAs were driving company's car and ran through the red light and since the car was registered to the Onelife company, it was summoned to court but did not show up so they got sentenced anyway. Now it's time to correct that.

But there is no case of the permanent Onecoin ban in the Italy cause the company is "scam". It is a minor glitch that indeed needs to be fixed by the company and we saw that they are working on it.

Igorkrnic
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Posts: 449
Joined: Wed Jun 14, 2017 7:47 pm

Re: ITALY Case Analyzed

Post by Igorkrnic » Sat Aug 12, 2017 9:32 pm

UPDATE August 10 2017.
Seems like August 2017 is a "fine spree" for AGCM :)
Image

Onelife was not missed by this "fine spree" because:
The Authority had initiated a proceeding against One Network Services Ltd. And three physical people in their quality of the registrars of the promotional sites onecoinsuedtirol.it, onecoinitaliaofficial.it, onecoinitalia.com. (See press release of December 30, 2016) and suspended the activities related to the promotion of said cryptomoneta
We can see that some investigation about this case was continued after issuing those suspensions described in above text.
Indeed, the most substantial part of the revenue generated by the activity promoted by professionals would result not so much from the purchase of the OneCoin virtual currency, but rather from the payment of the shares that consumers are called upon to pay when they join the system.
It is clear that since this is Pyramid sales department of AGCM they are worried not so much about promising high returns from Onecoins (cause also mainstream media does regularly about Bitcoin), but they were focused on the fact on payments people needed to make to join the system. I personally have no clue what they are talking about cause you can join Onelife without even paying anything, just open Rookie free account and start selling. If you sell education or other products, it is ok to earn some money along. It is MLM
To reach the earning target, they seem to be required to recruit other consumers. These behaviors appear to be related to the dynamics typical of pyramid sales.
Wait, if I want to earn my target profit from compensation plan I need to recruit people? Not true. You can earn money if you sell a bunch of education or other products to end users, with zero recruitments. Seems like the problem here is that those IMAs practiced recruitment only model and the company Onelife did not respond to the Italian authorities so this investigation ended with Verdict and a fine to Onelife company too:

This is a link to the original verdict.

Let's quote what it says:
The Verdict wrote:The Competition Authority, at the conclusion of its inquiry, found that the methods used by One Life Network LTD with the help of other professionals to promote the purchase of the OneCoins Virtual Coin and training packages sold in conjunction with.
This was incorrect from the point of view of the information provided to consumers about the characteristics of the product and its pyramid sales system. The practices in question ceased in Italy following the suspension measures adopted by the Authority prior to ONE NETWORK SERVICES LTD and the registrants of onecoinsuedtirol.it, onecoinitaliaofficial.it, onecoinitalia.com, and then on the companies ONE LIFE NETWORK LTD, Easy Life Srl
It is clear that authority holds Onelife company responsible because their IMAs were promoting misleading material that promised to cash out Onecoins in 2018 and also only focused on recruitments of new people in order to earn money and that does look like a pyramid.
This was breaching of Onelife ToS:
Onelife ToS wrote:- An IMA may not make any claims, promises or other indications about potential speculative changes in exchange rates.
- The client should not be led to purchase the products through dubious and/or misleading promises nor by promising special benefits when these are linked to uncertain future outcomes.
(15) IMAs may only market ONELIFE NETWORK system and services or recruit new IMAs in those states and countries officially authorized by the Company.
(16) IMAs are always prohibited from selling their own marketing and/or sales documents to other IMAs or from otherwise distributing them
Maybe this ToS did not exist when Italian IMAs in this subject started working so maybe this is why the company is held responsible for them.
The Verdict wrote:In particular, the promotional activity was centered on the promise that the consumer, after acquiring a training package, could obtain OneCoins (through a process of transforming the rough currency called mining) and that later those virtual coins would have increased the Their value as a result of their dissemination, all the elements that they did not find in the course of the proceedings. One Life's business proposal was therefore based on a false, high-profit prospect: for example, the purchase of the $ 27,530 package would have allowed a value of € 3,000,000 after just two years of joining the program.
Here we can see that high return of sales was promised to people. It's not a secret that Onecoin is not publicly traded, it is in ICO state.
It is true that $27530 packages will yield Onecoins that have an internal value of $3 million and that WILL be their value once ICO finishes but the company DOES NOT promise to cash out those coins. The focus is mostly on the usability. Public trading will determine the real value.
Seems like their promotional material was too much optimistic about selling the coins at this price.
The Verdict wrote:The procedure has enabled the Court to ascertain whether the practice was incorrect in relation to the deceptive modalities in which the features, terms and conditions of the proposed product were proposed, and whether the system incorporated a pyramid sale referred to in the Consumer Code Commercial practices in any case misleading.
If they read Onelife T&C they would see that it is not the pyramid system. But maybe they refer to the T&S from the Easy Life Srl and onecoinsuedtirol.it, Onecoinitaliaofficial.it, onecoinitalia.com
The Verdict wrote:Therefore, in the light of the numerous evidences gathered thanks to the valuable collaboration of the Antitrust Special Department of the Guardia di Finanza for the conduct of numerous investigative investigations, the Authority concluded the proceedings by imposing sanctions against the companies ONE LIFE NETWORK LTD (€ 2,000. 000), ONE NETWORK SERVICES LTD (€ 500,000), Easy Life Srl (€ 80,000), as well as with the registrants of the onecoinsuedtirol.it sites, Onecoinitaliaofficial.it, onecoinitalia.com. (€ 5,000 each).
So with numerous evidence investigated on marketing material and mentioned websites (they never mentioned onelife.eu and T&S on that web site) authority put out fines for Onelife company and also EasyLife SRL probably owned by verdict IMAs.

CONCLUSION:
Onelife IMAs who owned a company EasyLife SRL, web sites onecoinsuedtirol.it, Onecoinitaliaofficial.it, onecoinitalia.com also marketed promotional materials of their own. Those promotional materials did not follow Onelife T&C guidelines but were focused on promising the sale of Onecoins in 2018 and also were putting recruitment of other people being a pyramid system indeed. So the company is being held responsible for their actions and it also got the most of the fine.
It is clear that Onelife T&C is not a pyramid sales system. Also at Onelife events that I followed and watched, if persons were summoned to the event for the first time they are being presented Onecoin concept and how to participate ICO, and no one is mentioned MLM system or recruitment, simply how to buy education and participate Onecoin ICO. Later on, on the follow-up, some people are also being presented an opportunity to spread this info further. That is how MLM works. But since the Onelife company did not respond to the authorities, they could only work and rule with the material obtained by those IMAs so it is totally normal that the company receives a fine.


It would not be the first time that a big MLM company receives a fine and moves on reorganized:
Herbalife paid $200Million fine because their leaders were promising unreal profits. One of the articles from Fortune.com is here. Wait, why did fortune.com did not write about Onecoin?

Also, Amway did not miss the chance to pay $25Million fine. So what happened to them?
The article is here.

Igorkrnic
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Posts: 449
Joined: Wed Jun 14, 2017 7:47 pm

Re: ITALY Case Analyzed

Post by Igorkrnic » Sat Aug 12, 2017 9:43 pm

UPDATE August 12 2017.
The Onecoin company made an announcement about this fine

Here is the original link.

Image

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