Sunday, 19 March 2017

Analysis of OneCoin blockchain - Summary of findings and Q & A about approach

1. Can you give a summary of the analysis and findings on the OneCoin "Blockchain" so far?

2. The OneCoin Blockchain is "private" and "closed source", how can you claim to know ANYTHING about it?

3. How sure are you that the current OneCoin Blockchain is simulation software with fake block and transaction data?

4. How sure are you that there is not a "real Blockchain" behind the current façade?

5. The OneCoin Blockchain has been audited by external, independent auditors. Isn't that enough proof of the existence of the cryptocurrency and the Blockchain?

6. If the OneCoin software developers would implement a Blockchain modification, so that for instance tokens submitted for mining and transfers to Upline/Downline members would appear on the Blockchain pages, would that be proof that a real Blockchain exists?

7. Can the OneCoin company still create a real Blockchain?

8. There are numerous other fake altcoins. Why do you target OneCoin specifically?

9. OneLife sells Educational packages, does anybody have the right to complain if the Blockchain is fake and OneCoin is not a cryptocurrency?

10. Is OneLife/OneCoin a Ponzi scheme?

11. What is your advice for people who realize that they have been deceived and want to quit?

12. You are anonymous bloggers, why are you hiding your identity?

13. Who is paying you to maintain this website?

14. If you're not paid, what is your motivation to maintain this website?


1. Can you give a summary of the analysis and findings so far?

The article Part 12 - Purchase E-book on Dealshaker.com is the last one in a series of (technical) analysis of the OneCoin "Blockchain". It is the last article of this type, because we have investigated all possible transaction types which we were able to execute with OneCoins.

We have never seen any of our transactions on the OneCoin Blockchain screens. This is irrefutable proof that this "Blockchain" is simulation software connected to separate database tables with fake Block and Transaction data, hence OneCoin is not a cryptocurrency.

Definitions:
(OneCoin) Blockchain: pages with Block and Transaction data visible in the onelife.eu backoffice (after login), accessible via Menu option CRYPTOCURRENCY > BLOCKCHAIN
Block: data visible via hyperlink https://www.onelife.eu/backend/cryptocurrency/blockchain/block/[block-hash-id]
Transaction: data visible via hyperlink https://www.onelife.eu/backend/cryptocurrency/blockchain/tx/[transaction-hash-id]

Publication
Date
HyperlinkSummary of findings
9 March 2017Prohibitions and Warnings by Legal Authorities
23 November 2016Part 1: MiningWe submitted Tokens for mining, ten times in a row.
For none of the "mined" Onecoins a Transaction was visible on the Blockchain screens.
NB: The Blockchain explorer which shows Block data was not active on that day. Only Transactions were visible (with automatic refresh of data).
1 December 2016Part 2: Transfer of Onecoins to downline IMAFrom the Onecoin Account of an Upline IMA (Independent Marketing Associate), send Onecoins to a Downline IMA, a number of times in a row. Four transfer Transactions were executed, with 1, 2, 3 and 4 Onecoins respectively. These transfers of Onecoins to a downline IMA were not recorded in the Blockchain.
4 December 2016Part 3: Transfer of Onecoins to Xcoinx ExchangeOn the Xcoinx.com exchange website, transfer Onecoins from the OneLife Account to the Xcoinx Account, 10 times in a row.
Transfers of Onecoins from the OneLife account to the Xcoinx account were not recorded in the Blockchain.
NB: Because xcoinx.com is closed to prepare for the IPO (Initial Public Offering) planned in 2018 Q2, this procedure is not reproducible anymore.
14 December 2016Part 4: "genesis block #0" - Version 21. According to Dr Ruja Ignatova 1,986,580,000 Onecoins were "mined" within one minute and the Blockchain explorer shows that the complete output went to one Input Address. As these Onecoins are supposed to belong to about 2.5 million paid accounts, this is conclusive evidence that "genesis Block #0" including its Transaction is fake.
2. The Onecoin Account - Transaction History of the account we used for this analysis shows two Blockchain migration related Transactions with timestamps of one and two minutes after midnight on 1 October 2016 GMT/UTC. The "mining" of the genesis block happened 9.5 hours later. This is conclusive proof that this "revelation" during the Mastermind Event in Bangkok was one big show.
28 December 2016Part 5: Automatic Onecoin buy orders (mining)For the automatically "mined" Onecoins no Transaction was visible in the Blockchain.
9 January 2017Part 6: Buy/Sell orders via Xcoinx ExchangeNone of the orders executed via the Xcoinx Exchange we investigated was visible in the Blockchain explorer in the onelife.eu back-office.
NB: Because xcoinx.com is closed to prepare for the IPO (Initial Public Offering) planned in 2018 Q2, this procedure is not reproducible anymore.
4 February 2017Part 7: "Mining" outside the "Blockchain"We were able to "mine" OneCoins on a day when the complete Blockchain was out of order for maintenance. The evidence that this OneCoin Blockchain is fake/simulation was never so obvious and in fact this makes all other investigations superfluous.
13 February 2017Part 8: Blockchain Explorer Simulation SoftwareWe analyzed the characteristics of the OneCoin Blockchain simulator and gave a number of "recommendations" (DO's and DON'Ts) to make the Block and Transaction data look more credible.
22 February 2017Part 9: Transfer of OneCoins to downline IMA - VideoNew and very strong evidence, illustrated by means of a video, that transfers of Onecoins to a downline member are not recorded in the "Blockchain" and hence that the Blockchain is simulation software.
6 March 2017Part 10: Audit ReportsThe first auditor of Semper Fortis explicitly excluded Token transactions, i.e. the "mining" proces.
The second auditor of S Systems Ltd explicitly stated that he accepts the data, provided by One Network Services Ltd, as correct and that he holds no responsibility concerning the data correctness.
In other words, both auditors did not investigate the origin and authenticity of the Transaction data in the Blockchain, which were fake/simulation.
This makes all audit reports meaningless and useless.
12 March 2017Part 11: Converting OneCoins for OFCsFour transactions for conversion of OneCoins to OFCs (Options for Future Certificates) were not visible in the Blockchain, which delivered more evidence that this Blockchain is fake/simulation.
18 March 2017Part 12: Purchase E-book on Dealshaker.comFour transactions for the purchase of products on the Dealshaker platform were not visible on the Blockchain screens.

2. The OneCoin Blockchain is "private" and "closed source", so how can you claim to know ANYTHING about it?

The OneCoin Blockchain is "private" indeed, but that is not a synonym for "completely invisible". On the contrary, the OneCoin Blockchain is visible for everybody who can login with an account on onelife.eu. Even a free Rookie account is sufficient to do this.

If you chose "CryptoCurrency" in the left menu, you go to the MINING page where you can see the latest six "Transactions". On the BLOCKCHAIN page, accessible via hyperlink https://www.onelife.eu/backend/cryptocurrency/blockchain (login required), you find hyperlinks to the latest six Blocks. And on each Block detail page there are hyperlinks to the "previous block" and the "next block(s)".

Next to the free Rookie accounts, we have received the "credentials" (User Name, Password and Transaction Password) of a number of paid accounts (Trader, Pro Trader and Tycoon Plus). These credentials were handed over voluntarily by other IMAs who found that they have been deceived and that the Tokens and OneCoins are (almost) worthless. With these accounts we can execute real transactions with Tokens and OneCoins, as described in the series of (technical) analysis on the OneCoin Blockchain.

The software programs on the other hand are indeed "closed source". But we really don't need this software to come to the conclusions we have described.

3. How sure are you that the current OneCoin Blockchain is fake/simulation software?

We are 100% sure that the current OneCoin Blockchain is fake. This conclusion is based on three different types of evidence:

a. We have executed all Transaction types which are possible with OneCoins ourselves (except automatic mining for packages which have automining, i.e. Premium Trader and more expensive packages). We have never seen any of our Transactions on the Blockchain pages.

b. By means of an automated tool (Selenium IDE, a plugin of the Firefox browser) we automatically "browsed" through all Blocks. This way we downloaded and saved all Block and Transaction data from Block #0 (the genesis Block), created on 1 October 2016 09:31:13, up to and including Block #128429, created on 31 December 2016 23:59:41. We imported these data in an Excel spreadsheet to make calculations of daily statistics. In a nutshell, these statistics are incredible.
For instance, the wild fluctuations in the number of transactions are far from realistic if these would reflect OneCoin transactions in a fast growing community of IMAs (according to the OneLife Newsletters that is).

This is a graph of the daily statistics of the fourth quarter of 2016. We will make a similar version of the first quarter of 2017 immediately after 31 March.

c. We have "zoomed in" on the detail Transaction data and found that a large number of Transaction amounts are incredible:
  • Each block contains one, and only one, Transaction with 50,000 ONE (the newly "mined" coins) which always has only one Input Address. This is inconsistent with the concept of mining in pools, where the "reward" should be distributed among the different miners, i.e. with a separate Input Address for each miner.
  • In the past transfers of OneCoin to Upline/Downline IMAs, as well as Buy/Sell transactions via the external exchange and later xcoinx.com, were only possible with round numbers, i.e. it was not possible to transfer or buy/sell fractions of OneCoins. The vast majority of OneCoin Transactions had fractions.
  • The only transaction types with amounts with fractions, were the result of mining transactions. Except for "Auto buy from Trading accounts", which happen only on Mondays, amounts in fractions can be the result of submitting Tokens for mining. If you multiply the OneCoin Amount by the Difficulty Factor valid on the Transaction date, the result should be a round number, with only few rounding errors (as the Amount of OneCoins = Number of Tokens submitted for mining, divided by the Difficulty factor. The vast majority of Transactions did not comply with this rule.

4. How sure are you that there is not a "real Blockchain" behind the current simulation/façade?

We are aware of Russell's teapot analogy and we realize that it is impossible to give 100% proof of the non-existence of a OneCoin Blockchain.
However, we did not claim that OneCoin is a real cryptocurrency with a real Blockchain, OneCoin Founder & Visionary Dr. Ruja Ignatova and the companies OneCoin and OneLife claim this. So she, or representatives of the OneLife/OneCoin companies, must deliver the proof. They failed with OneCoin Blockchain Version 1 and 2.

NB: We recently read announcements on Facebook about a Whitepaper which will be published soon, which will contain the "proof" of the existence of the OneCoin Blockchain. We are looking forward to that.

5. Isn't the fact that the OneCoin Blockchain has been audited by external, independent auditors enough proof of the existence of the cryptocurrency and the Blockchain?

Absolutely not. We have analyzed all 18 Audit Reports, 3 made by Semper Fortis auditor Dian Dimitrov and 15 made by S Systems Ltd auditor Atanas Lazarov. We found evidence that both auditors based their positive conclusions on the wrong assumption that the Blockchain data represented real/genuine Transactions, while there is proof that the Blockchain Transaction data are fake. This makes the first 18 Audit Report meaningless and useless, they prove nothing.

Moreover, even IF these Audit Reports had any value, they are invalidated by definition since on 1 October 2016 a new Version 2 of the OneCoin Blockchain was launched. Apart from the starting Balance in the OneCoin and Coinsafe Account, there is no connection between Versions 1 and 2. Since september 2016 no new Audit Reports have been published.

6. If the OneCoin software developers would implement a Blockchain modification, so that for instance tokens submitted for mining and transfers to Upline/Downline members would appear on the Blockchain pages, would that be proof that a real Blockchain exists?

No, in the current phase with a Blockchain simulatior which exists since 1 October 2016, it would not have any value if "suddenly" specific transaction types, or even all transaction types, would appear on the Blockchain pages. On the contrary, it would only produce more evidence that the current Blockchain version is invalid (i.e. fake/simulation). This has to do with the basic concepts of a blockchain, which - oh the irony - is also supported by this description on https://www.onecoin.eu/en/blockchain:
  • "OneCoin’s blockchain consists of each transaction ever performed in OneCoin.
    [...]
    The blockchain is based on protocols that authenticate, validate and store information in consistent, unbroken sequences that make the system safer by eliminating any attempts of fraud, duplicity and forgery."

One of the characteristics is that a Blockchain has to be valid and complete from the start. It cannot be changed or repaired after the launch.

The concepts of Blockchain technology are illustrated in this great video: https://anders.com/blockchain/

7. Can the OneCoin company still create a real Blockchain?

With suitable skilled people it should be possible to build a real OneCoin Blockchain indeed. However, due to the basic characteristics of any cryptocurrency, this cannot be done by "repairing" the current version of the Blockchain. The complete Blockchain must be built again from the start, i.e the genesis Block.

The genesis Block must be custom made with about 2.5 million e-wallets with the start balance, one for each existing user account which contained OneCoins on 1 October 2016. After that all OneCoin transactions since 1 October must be migrated to this new Blockchain in strict chronological order, a task which probably can be automated.

We have no idea how a real Blockchain would fit in the characteristics of the current simulation blockchain, like the Token conversion for "mining" and the non-sensical Difficulty Factor. Probably Dr. Ruja must come up with something completely new.

Whatever Ruja will do, because we have downloaded all detail simulation Blockchain data from 1 October 2016, we will discover every change in Block and Transaction data.

So although it is technically feasible, implementing a new OneCoin Blockchain would reveal immediately that the current Blockchain is fake. It would not make sense at all to do this, as a private Blockchain has hardly any advantages compared to the "regular database" the companies currently use.

Moreover, by no means would the development of a real Blockchain make the fraudulent OneCoin company legitimate afterwards.

8. There are numerous other fake altcoins. Why do you target OneCoin specifically?

For two reasons:
  1. OneCoin is by far the largest in terms of money inflow and number of members.
  2. OneLife/OneCoin is represented by a large number of noisy pathological liars, which we don't really like (to put it mildly).

9. OneLife sells Educational packages, does anybody have the right to complain if the Blockchain is fake and OneCoin is not a cryptocurrency?

A recent document with title Compliance rules in the onelife.eu backoffice
contains the following text on page 30:
  • We are selling educational packages and give the MAs an opportunity to apply the knowledge about the cryptocurrency into practice by providing them some promotional tokens which give access to the mining pools but not guarantee that and how many coins will be received.
  • Tokens provided when activate the particular package are promotional ones and give the opportunity to IMAs to apply their knowledge about cryptocurrencies they have acquired from our online education into practice.
  • Remember: no one buys OneCoins or tokens


Similar texts about promotional tokens, the access to mining pools (which is not guaranteed) can be found in the General Terms and Conditions.
This attempt to limit the legal liabilities by the OneLife company is ludicrous, because there is so much proof that contradicts this, that we will dedicate a special article to this topic.

In this Q&A we limit ourselves to some examples.

a. Investment advice by OneCoin Founder and Visionary Dr. Ruja Ignatova
These two videos are published on the YouTube channel OneLife (offical). Count the number of times you hear the word "education". If you don't have time to listen, the answer is: zero.

Split Strategies - by Dr. Ruja Ignatova

Introducing the Tycoon+ and Ultimate Packages! - by Dr. Ruja Ignatova

b. "Promotional Tokens" are an integral part of the products, the so-called "educational packages"

See for instance the description of the Infinity Trader Package

c. The OneCoin "cryptocurrency" is the heart, the center of the "Ecosystem"
This is slide/page 21 of the current official OneLife Network presentation in the onelife.eu backoffice:


d. The goal of the OneLife Network is to create a Global Reserve Cryptocurrency
We give two examples.

Screenshot of Live Stream of OneLife Mastermind Event, 1 October 2016 in Bangkok. Presenters: Sebastian Greenwood and Ed Ludbrook

Watch this video fragment of this presentation. Ed Ludbrook is speaking:
  • "So our message is really simple and it's all in this one graph that you need to learn, you need to understand and it's so simple, we have pioneered for two years, we have proven that we are the strongest,  most dominant cryptocurrency in the race, in the race to achieve and create the first global reserve cryptocurrency, we are winning!"

Official presentation of Coinrush Event, 11 June 2016, London, Page 8:
Dr. Ruja Ignatova, Coinrush Event, 11 June 2016, London


10. Is OneLife/OneCoin a Ponzi scheme?

Yes, without a doubt. We know Tom McMurrain's popular YouTube video (i.e. popular among OneLife members) in which he explains why OneCoin can NOT be a Ponzi scheme.
He was right on two important points:
a. When new money comes in because members buy products, the OneLife company has to pay commission to Upline members only once.
b. Members are not required to buy or sell products or pay monthly fees.

However this video contains several blatant lies.

a. McMurrain claims that the value of the coin is determined by the miners because of supply and demand.
This is a lie because the price of OneCoin, which is displayed in the onelife.eu backoffice and which the majority of the members firmly believe in, is dictated by Dr. Ruja Ignatova (based on nothing) and nobody else.

b. McMurrain explicitly states that the company does not promise an interest rate.

This is a lie, because OneLife promises a guaranteed Return On Investment with the Coinsafe account. We have tested this ourselves. If you choose a duration of two years, any transfer of OneCoins to Coinsafe is immediately increased by 12% interest in coins (or 12/100 profit share ratio if you select the Sharia compliant version).

Regular banks pay much less than 1% interest for savings accounts with two year fixed interest rates.

NB: the fact that OneLife pays interest in OneCoin has always been inconsistent with the following text on https://www.onecoin.eu/en/cryptocurrency
  • "OneCoin is not a pre-mined cryptocurrency, meaning that the OneCoin miners create the market. "
Note: Currently IMAs are exchanging OneCoins for OFCs (Options for Future Certificates) so the company is collecting large numbers of OneCoins (not that it really matters, because nobody outside the company can check this).

c. The most important Ponzi element in this network is that new members are lured in because of continuous predictions about the development of the OneCoin cryptocurrency and comparisons with the Bitcoin price.

We give one example from the OneLife Video Presentation. The financial revolution [ENG]:
  • "According to the first predictions in 2014 the value of a single OneCoin after one year was to reach 5 euro.

    However, already ten months later the price of a single OneCoin exceeded the initial prognosis and hit 5.65 euro. OneCoin is expecting a further increase in value within the next couple of years, based on the constantly growing network of miners, but also because of the numerous companies who want access to the millions of Onecoin owners to promote their services and products, thus expanding the utility area even further.

    This is not a promise or a guarantee in any way, however the historical aspect of OneCoin's journey so far makes the future even more exciting and it can benefit the entire modern society and future generations."

The voice-over mentions the hypocritical formal disclaimer ("this is not a promise or a guarantee in any way"), but in the graph we see a "prediction" of the OneCoin price in a couple of years, a "careful" version with an increase to 50 euros and an "optimistic" version with an increase to 100 euros.

NB: This video was first published in August 2016 when the OneCoin price was 6.25 euro.

11. What is your advice for people who realize that they have been deceived and want to quit?

  1. If you have euros in your Cash Account, withdraw the full amount ASAP as this whole system can collapse any moment.
  2. If you have not done so yet, don't submit your real KYC documents! There is a great risk that in a later phase the KYC documents will be abused to commit identity theft.

12. You are anonymous bloggers, why are you hiding your identity?

For two reasons:
a. We are convinced that professional criminals are running this operation behind the screens, so we are concerned about our safety.

b. Our motto is: "facts don't need a face". Adding names and profile pictures to this website would not change anything and would only distract the attention from the important subjects.

Our aim has always been and will always be, to describe the procedures we have applied ourselves in such a way that they are reproducible by anybody with a OneLife account.

We have considered to ask some well-known Blockchain experts to endorse our approach and conclusions, but we decided not to do this, because:
  • If we are concerned about our own safety, we cannot expect other people to speak out.
  • We have already seen that even the most respected (i.e. outside the OneCoin/OneLife community) Blockchain experts are turned down for being "Bitcoinists".

13. Who is paying you to maintain this blog?

Nobody.
  1. We have never received a penny or 0.00000001 Bitcoin and will never accept anything in the future either.
  2. We even did not switch on the feature to display ads on this website.
  3. We get our information from many sources, but we are not associated with or dependent on any other website or blog.
  4. And finally, we won't lose one minute of sleep if the Bitcoin price crashes.
    NB: If other people do, we respect that.

14. If you're not paid, what is your motivation to maintain this website?

We want to prevent that more victims are lured into this ponzi / pyramid system.


Saturday, 18 March 2017

Analysis of OneCoin blockchain - Part 12 - Purchase E-book on Dealshaker.com

A. Summary of Conclusions
  1. It is possible to buy Deal Coupons on Dealshaker.com with OneCoins.
  2. The OneCoin Transactions in the CoinSafe Account and OneCoin Account are executed without any waiting time. In other words: there is no waiting at all for the next "Block" to be created.
  3. None of the four purchase Transactions we executed is visible on the BLOCKCHAIN screens, while the onelife.eu website states that detailed information on each mined block and performed transactions is visible.
  4. This is new conclusive proof that OneCoin transactions are not recorded in the "Blockchain" and hence that the Blockchain is simulation software connected to separate database tables with fake Block and Transaction data.
  5. This is new conclusive proof that OneCoin Founder Dr. Ruja Ignatova lied when she said that all transactions that are done by OneCoin members are visible in the Blockchain. 
  6. We were able to purchase articles with an account which has not passed the KYC / Know Your Customer procedures. This is proof that this statement on the https://www.onecoin.eu/en/ website is nonsense:
    "We are open and honest in our dealings. By being the first cryptocurrency storing KYC documents in its new blockchain, we set a new industry standard."

B. Objective and Procedure 
DISCLAIMER: the authors of this article have tried to execute an objective investigation. None of the data have been manipulated, only some personal data on screenshots are hidden.

The complete procedure is step by step reproducible by anybody with a OneLife account with OneCoins in the OneCoin Account and/or CoinSafe Account.

The aim of this analysis is to buy articles on the dealshaker.com platform with OneCoins, to check the consistency and completeness of OneCoin Transactions which are visible in the Blockchain explorer on the OneLife backoffice website.

Information supplied by the OneCoin company on the Blockchain
As stated on the https://www.onecoin.eu/en/blockchain page "The OneCoin Blockchain Consists of Every Transaction Ever Performed in OneCoin".

For more info and screenshots, see other articles in the "Analysis of OneCoin blockchain" series.

Information supplied by the OneCoin company on the Dealshaker platform
The ABOUT section on the Dealshaker website contains the following information:
  • Dealshaker is an online deals marketplace and advertising service provider with a membership-based customer base. The platform enables business-to-customer and customer-to-customer deal promotions in combination of cash (EUR) and the new-age, mass cryptocurrency-OneCoin. Ads are grouped based on geographic area, business category and type. 


Procedure
We used the following procedure during this analysis:
  1. Log in on an existing OneLife account which has a number of OneCoins in the CoinSafe Account.
  2. Log in on the Dealshaker.com platform with the same account.
  3. On the Dealshaker website, purchase Deal Coupons for the same article with a Deal Price of 0.79 ONE four times in a row, with Quantity 1, 2, 3 and 4 respectively.
  4. Check in the CoinSafe Account (login required) if the Transactions are executed and at which timestamps.
  5. Check in the OneCoin Account (login required) if the Transactions are executed and at which timestamps.
  6. Check on the Dealshaker website if the purchases are successful.
  7. Check on the Cryptocurrency Blockchain pages which Transactions are visible. If the Blockchain is complete four Transactions must be visible with 0.79, 1.58, 2.37 and 3.16 OneCoins respectively.

C. Fact Finding and Analysis
Looking for low priced deals which can be fully paid in OneCoin (i.e. without euros), we found this bargain for only EUR 0.79: E-book about crypto-currency in English by Udo C Deppisch.
This enabled us to kill two birds with one stone (as we always want to learn from the best).

The process of purchasing articles started on Saturday 18 March 2017 08:50 AM GMT/UTC. For the record we posted a Tweet with timestamp and Height of the latest Block immediately before we started.


The latest Block was #233257 at that moment.

Hyperlink to Block #233257

The entire process took about 13 minutes. For the record we posted a Tweet with timestamp and Height of the latest Block after the fourth purchase was finished. The latest Block was #233270 at that moment.

NB: we discovered that the complete COUPON IDs were visible, so we decided to delete the second tweet, after making this screenshot:

During the purchase process the following Observations were made:
  1. Immediately after each purchase a transaction was visible in the Transaction History of the CoinSafe Account with the following description:
    "Request for conversion from Coinsafe to Onecoin; Dealshaker purchase order".
  2. Immediately after each purchase two transactions were visible In the OneCoin Account with status "approved" and the following descriptions:
    - "Request for conversion from Coinsafe to Onecoin; Dealshaker purchase order"
    - "process purchase order for DealShaker to username: UCDStore"
  3. The Purchase price per coupon shown in the shop is 0.79 ONE. The real price proved to be 0.79487179 ONE, but this was not visible before the deal was executed.
    This is undoubtedly a consequence of the following:
    a. Originally, in the period when the OneCoin price was 7.75 EUR, the price per coupon was exactly 1 ONE. The deal price is registered in euros and the merchants decides which percentage of the total deal price he wants to receive in OneCoins (at least 50%), in this case 100%.
    b. After the increase of the Difficulty factor from 79 to 99 the OneCoin price in Dealshaker increased from 7.75 EUR to 9.75 EUR.
    c. The price of deal in OneCoin was adjusted to 7.75 / 9.75 * 1 = 0.79487179 ONE. Only the first two decimal positions (0.79) were visible in the shop, so the real price was higher (example of bad design).
  4. During the complete procedure none of the four OneCoin Transactions was visible on the LATEST TRANSACTION screen.
  5. Afterwards we checked all Transactions in Block #233257 up to and including Block #233272. In none of these Blocks any of the four Transactions is visible.

We illustrate the complete process by means of a number of screenshots.

"Your Purchase" screen with Quantity = 1 and Price = 0.79 ONE

CONGRATULATIONS screen after successful purchase

Coinsafe Account immediately after Purchase #1

Screen with link to Coupon after Purchase #1

Purchase #4: Total PRICE = 3.16 ONE (4 x 0.79 ONE), Quantity = 4 

Coinsafe Account after Purchase #4

Example of Deal Coupon with instructions on how to redeem the coupon

OneCoin Account with 8 transactions after 4 purchase orders


Table with Block and Transaction data:
Hash (including hyperlink to Block data, login required)HeightTimestamp (GMT/UTC)Number of
Transactions
Transaction Amounts
f0d375873f870229b28b7bb0b0d73ece78b2359aa52a3993722c2c134f9168fe23325718/03/2017 08:49:46350000.00000000 ONE ("mining")
55.69620253 ONE
1 "KYC" transaction
8a32cf33c445e0b1893be3fc734ff1e194c21ebd58c4547404c3fa91fcdbb36923325818/03/2017 08:50:491450000.00000000 ONE ("mining")
1 589.44871795 ONE
1 589.44871795 ONE
1 327.21153846 ONE
1 330.41666667 ONE
3 557.69230769 ONE
3.18987342 ONE
612.65822785 ONE
50.63291139 ONE
50.63291139 ONE
506.32911392 ONE
1.73417722 ONE
2 "KYC" transactions
ac58f421324b3afba933862cbb827fd8c526c79719f8ad53ea5e6e3ad97f1a9223325918/03/2017 08:51:591150000.00000000 ONE ("mining")
5 769.23076923 ONE
524.47435897 ONE
96.58730769 ONE
530.88461538 ONE
265.44230769 ONE
15.82278481 ONE
55.69620253 ONE
1 592.65384615 ONE
50.63291139 ONE
1 "KYC" transaction
6f8d59c7d8931720f18f0aca2aea2d49751465c608e9c494699024871eead20023326018/03/2017 08:52:561450000.00000000 ONE ("mining")
2 692.30769231 ONE
5.39568333 ONE
2.50632911 ONE
23.65153974 ONE
89.51300385 ONE
1.00000000 ONE
1.00000000 ONE
50.63291139 ONE
2.01265823 ONE
6.41025641 ONE
12.65822785 ONE
2 "KYC" transactions
6f27114cf2d28a173ef34eedebfd66949813a1fd9e7d6dc9d0cdfe8933ccc3a323326118/03/2017 08:54:001350000.00000000 ONE ("mining")
1 336.82692308 ONE
4.05063291 ONE
1 730.76923077 ONE
9.80815256 ONE
389.87341772 ONE
278.48101266 ONE
18.98734177 ONE
99.24368077 ONE
55.69620253 ONE
17.99483462 ONE
0.35443038 ONE
1 "KYC" transaction
d1b813029004c996f543e259636fe3533ffd57a968b2182d07d323dfbbdbcaa12332 6218/03/2017 08:54:591450000.00000000 ONE ("mining")
1.46835443 ONE
3.59493671 ONE
32.24050633 ONE
4.75949367 ONE
50.63291139 ONE
55.69620253 ONE
1 589.44871795 ONE
2.20253165 ONE
303.79746835 ONE
556.96202532 ONE
12.65822785 ONE
2 "KYC" transactions
e443d3e4472369cf197b43b68b7f48f4254f93a517754d53d8ab89d7f7478d2a23326318/03/2017 08:56:001450000.00000000 ONE ("mining")
23.74683544 ONE
3.23076923 ONE
1 589.44871795 ONE
59.69747179 ONE
93.05063291 ONE
50.63291139 ONE
50.63291139 ONE
50.63291139 ONE
9.18987342 ONE
1.18987342 ONE
25.31645570 ONE
50.63291139 ONE
1 "KYC" transaction
4e4ef53bbd7eef30519fe4741d009fd218ed3c755a6f563cd828c71f2f7d103d23326418/03/2017 08:57:001550000.00000000 ONE ("mining")
303.79746835 ONE
1.01265823 ONE
3.55100897 ONE
15.43903333 ONE
50.63291139 ONE
2.45729487 ONE
6.95535769 ONE
1 336.82692308 ONE
50.63291139 ONE
1 330.41666667 ONE
2.20253165 ONE
3 "KYC" transactions
5207d76c0ec56d85344e4a7281baad9490fbd81e8cbf52ef36638e50f37ca75623326518/03/2017 08:58:041250000.00000000 ONE ("mining")
7.40506329 ONE
4.46412051 ONE
53.29113924 ONE
50.63291139 ONE
1.10126582 ONE
3.03797468 ONE
325.90850385 ONE
0.77107436 ONE
4.84810127 ONE
0.87341772 ONE
50.63291139 ONE
ce30eccd70ae39a1993a9d1b19b1ae84f164a8eb6d90e92489508b0ab527d89b23326618/03/2017 08:59:081650000.00000000 ONE ("mining")
3.85537692 ONE
27.84810127 ONE
303.79746835 ONE
37.41007179 ONE
1.31645570 ONE
253.16455696 ONE
253.16455696 ONE
8.34177215 ONE
2.39240506 ONE
2 903.84615385 ONE
2.20253165 ONE
13.35546923 ONE
3 "KYC" transactions
f7a4c9e786a976d796513796917ce963329d545d5bae9696a0433c525ac6eb2d23326718/03/2017 09:00:101350000.00000000 ONE ("mining")
6.41025641 ONE
6.89909487 ONE
1.21748718 ONE
55.69620253 ONE
783.51282051 ONE
7.58900513 ONE
77.79376410 ONE
10.93670886 ONE
5.06329114 ONE
50.63291139 ONE
50.63291139 ONE
50.63291139 ONE
9c94fab29dbad719d8c5636a3f5b105cde75e87a1403feb9ca97172343d1512f23326818/03/2017 09:01:151550000.00000000 ONE ("mining")
57.03797468 ONE
4 474.06410256 ONE
0.35443038 ONE
1 589.44871795 ONE
50.63291139 ONE
27.84810127 ONE
50.63291139 ONE
50.63291139 ONE
1.79746835 ONE
2 900.64102564 ONE
1.60759494 ONE
3 "KYC" transactions
eb23bfd439a8cf25743ab2e9413797f977e6dc841b04cbcd6f1747efec9972fc23326918/03/2017 09:02:16950000.00000000 ONE ("mining")
0.45569620 ONE
303.79746835 ONE
253.16455696 ONE
5.23519615 ONE
253.16455696 ONE
50.63291139 ONE
50.63291139 ONE
55.69620253 ONE
21271e909154fd4fbbf0cde5182d06fabf208b372d9f48c7d494ad04f822cb9a23327018/03/2017 09:03:16650000.00000000 ONE ("mining")
50.63291139 ONE
0.96202532 ONE
334.17721519 ONE
1.20253165 ONE
1 "KYC" transaction
9ffddf848630beba1a19060b4b2cea2163b9e19bff65fc8983ec47d176bdf53323327118/03/2017 09:04:16650000.00000000 ONE ("mining")
0.63291139 ONE
127.49123718 ONE
50.63291139 ONE
253.16455696 ONE
1 "KYC" transaction
b6069bdd66ad1462bee615cd0808bfb79d93d673338dc2ab81025ea8470fa04c23327218/03/2017 09:05:20850000.00000000 ONE ("mining")
2 113.92307692 ONE
891.13924051 ONE
1 592.65384615 ONE
2.40506329 ONE
1 330.41666667 ONE
50.63291139 ONE
303.79746835 ONE

Sunday, 12 March 2017

Analysis of OneCoin blockchain - Part 11 - Converting OneCoins for OFCs

A. Summary of Conclusions
  1. It is unclear what OFCs - Options for Future Certicates - are.
  2. A very curious phrase in the Definition and FAQ is that OFCs are "provided free of charge". The alledged value of 1 OneCoin currently is EUR 9.85. The only way to get OFCs is to convert OneCoins, but the OFCs are "free of charge". We see an inconsistency here.
  3. It is possible to exchange/convert OneCoins for OFCs. The conversion from OneCoin in the CoinSafe Account is executed without any waiting time. In other words: there is no waiting at all for the next "Block" to be created.
  4. None of the four exchange Transactions we executed is visible on the BLOCKCHAIN screens, while the onelife.eu website states that detailed information on each mined block and performed transactions is visible.
  5. This is new conclusive proof that >OneCoin transactions are not recorded in the "Blockchain" and hence that the Blockchain is simulation software connected to separate database tables with fake Block and Transaction data.
  6. This is new conclusive proof that OneCoin Founder Dr. Ruja Ignatova lied when she said that all transactions that are done by OneCoin members are visible in the Blockchain. 

B. Objective and Procedure 
DISCLAIMER: the authors of this article have tried to execute an objective investigation. None of the data have been manipulated, only some personal data on screenshots are hidden.

The complete procedure is step by step reproducible by anybody with a OneLife account with OneCoins in the OneCoin Account and/or CoinSafe Account.

The aim of this analysis is to convert OneCoins into OFCs, so-called Options for Future Certificates, to check the consistency and completeness of the Transactions and other data which are visible in the Blockchain explorer on the OneLife backoffice website.

Information supplied by the OneCoin company on the Blockchain
As stated on the https://www.onecoin.eu/en/blockchain page "The OneCoin Blockchain Consists of Every Transaction Ever Performed in OneCoin".

For more info and screenshots, see other articles in the "Analysis of OneCoin blockchain" series.

Information supplied by the OneCoin company on the OFCs
According to the DEFINITIONS, an OFC is:
  • OFC (an Option for Future Certificate) – a possibility provided free of charge for the members of OneLife Network and users of OneCoin, contingent ONLY upon the Company meeting a number of objectives and in accordance with an irrevocable instruction from the User to do so, as a recognition, allowing them in future and according to the hereto stated terms and conditions, to benefit from it. 
We tried to understand what this means, but we failed.

Note: A very curious phrase in the definitions is that they are "provided free of charge". The alledged value of 1 OneCoin currently is EUR 9.85, the only way to get OFCs is to convert OneCoins. However, the OFCs are "free of charge". We see an inconsistency here.


In the Functionality notifications and nature of the OFC description we see another vague statement:
  • The hereto presented OFCs by their legal nature:
    9.1.1. Are to serve within the Companies using the hereto provided facilities as/for RECOGNITION purposes ONLY
... followed by a long list of NOTs, CANNOTs, NOs and ONLYs, which did not make us much wiser.


Our last straw is the Frequently Asked Questions list, which makes clear that an OFC is not a financial instrument and has no inherent value. They do not grant any ownership, voting or similar rights and do not guarantee any financial return in themselves.

And again we see the statement that it can be acquired "for free":


Procedure
We used the following procedure during this analysis:
  1. Log in on an existing OneLife account which has a number of OneCoins in the CoinSafe Account.
  2. From the CoinSafe Account, use the Convert OFC's function to exchange OneCoins for OFCs. Choose 200, 400, 600 and 800 OFCs respectively.
  3. Check in the CoinSafe Account (login required) if the Transaction is executed and at which timestamp.
  4. Check in the OneCoinOFC.com/ Dashboard (login required) if the Transaction is executed and at which timestamp it is visible.
  5. Check on the Cryptocurrency Blockchain pages which Transactions are visible. If the Blockchain is complete four Transactions must be visible with 1, 2, 3, and 4 OneCoins respectively (as the current rate is 200 OFCs for 1 OneCoin).

C. Fact Finding and Analysis
The process of converting OneCoins for OFCs started on Sunday 12 March 13:32 GMT/UTC. For the record we posted a Tweet with timestamp and Height of the latest Block immediately before we started. The latest Block was #225164  at that moment.



The entire process took about ten minutes. For the record we posted a Tweet with timestamp and Height of the latest Block after the fourth OFC conversion was finished. The latest Block was #225174 at that moment.

During the transfer process the following Observations were made:
  1. All conversions were immediately visible in the Transaction History of the CoinSafe Account as well as on the OneCoinOFC.com Dashboard.
  2. During the complete procedure none of the four OneCoin Transactions was visible on the LATEST TRANSACTION screen.
  3. Afterwards we checked all Transactions in Block #225164 up to and including Block #225174. In none of these Blocks any of the four Transactions is visible.
We illustrate the complete process by means of a number of screenshots.

Immediately before the start: 
  • at the left the CoinSafe account with the "Convert OFC's" button;
  • at the right the OneCoinOFC.com Dashboard with the conversion rate (1.00000000 ONE = 200 OFC's) and the starting Balance (1.0000 OFC's)


At the left we have filled in: Number of OFC = 200

At the right: OFC Balance has just been increased by 200

At the left: CoinSafe Transaction History after conversion of 1 and 2 OneCoin (ONE) respectively

At the right: OFC Balance has been increased by 200, 400, 600, 800 OFCs respectively

At the left: CoinSafe Transaction History after conversion of 1, 2, 3 and 4 OneCoins respectively 

Note: in the top two rows of the Transaction History the amount in the Amount column differs. Only the decrease in the "regular" Balance is shown.
The difference comes from the "Interest" balance, so the total decrease in OneCoins is 10 which is correct (1 + 2 + 3 + 4):


Table with Block and Transaction data:
Hash (including hyperlink to Block data, login required)HeightTimestamp (GMT/UTC)Number of
Transactions
Transaction Amounts
555892def6e79519d7613da4376f898d841e4dd55830d53add952ae61a65440822516412/03/2017 13:31:411150000.00000000 ONE ("mining")
36.29554051 ONE
1.45732405 ONE
3.30700633 ONE
16.81528608 ONE
70.23184684 ONE
31.27643291 ONE
48.17579494 ONE
25.47515823 ONE
2 "KYC" transactions
7cd39dfbd978f8a467e697b4d9a7b00505ecd1a6c1bf2e772e5e698805086bd922516512/03/2017 13:32:391150000.00000000 ONE ("mining")
4.93248354 ONE
196.17834304 ONE
0.56050886 ONE
0.56050886 ONE
7.39872532 ONE
2.04585949 ONE
4.48407595 ONE
0.11210127 ONE
2 "KYC" transactions
8dc57b7401986de632691ede03271f4540d51b69d9ec9ffa85b07580342fdc1722516612/03/2017 13:33:41450000.00000000 ONE ("mining")
7.49554051 ONE
6.77706962 ONE
1 "KYC" transaction
f142a6cdfc946ebab1e0663d3845b85ad174714fa1a78c947be084c2879f6e2922516712/03/2017 13:34:39650000.00000000 ONE ("mining")
0.19617722 ONE
0.19617722 ONE
0.95286582 ONE
0.67261139 ONE
1 "KYC" transaction
4fe929352e9f5eb1e8d4f40c418e946ddfcb998955ca939a662bf9f89427776322516812/03/2017 13:35:401250000.00000000 ONE ("mining")
49.29681519 ONE
7.90318354 ONE
281.12356582 ONE
0.11210127 ONE
279.85732405 ONE
1.42929873 ONE
4.48407595 ONE
13.90063671 ONE
52.46369367 ONE
2 "KYC" transactions
277404ed11b22fd13ab47cf966dbb729d33113d2f21ee9c218e391dea6500db822516912/03/2017 13:36:411050000.00000000 ONE ("mining")
0.61655949 ONE
1.23312025 ONE
33.99490380 ONE
0.39235570 ONE
0.22420380 ONE
9.05222911 ONE
12.58343924 ONE
2 "KYC" transactions
ccda9475050db6a09c5ef56a2024680cfbe80d2ac60bfc60e6c762ffdfb4788e22517012/03/2017 13:37:461250000.00000000 ONE ("mining")
7.48280253 ONE
0.87643291 ONE
0.00001266 ONE
0.47515823 ONE
18.16050886 ONE
162.80000000 ONE
53.75286582 ONE
7.29681519 ONE
3 "KYC" transactions
2cac43fd1594e0e756581a92289b64ab0d815da63a139d795bbfb9bb9536c92122517112/03/2017 13:38:491350000.00000000 ONE ("mining")
7.90318354 ONE
5.43694177 ONE
5.94140127 ONE
2.83057215 ONE
3.58726076 ONE
19.92611392 ONE
24.77452152 ONE
3.36305696 ONE
8.23948987 ONE
3 "KYC" transactions
234ccb10694771263ab87b12585bc04397357154252f4dbc81e1698ea91295ac22517212/03/2017 13:39:561150000.00000000 ONE ("mining")
1.87770633 ONE
4.76433038 ONE
0.39235570 ONE
1.03694177 ONE
0.05605063 ONE
0.11210127 ONE
9.66878861 ONE
3 "KYC" transactions
a26b42317000f95b4c42c209c5629f8c94bdc80113b6c06dd0eedfdf7668c0ae22517312/03/2017 13:40:581650000.00000000 ONE ("mining")
0.05605063 ONE
0.95286582 ONE
0.14012658 ONE
0.67261139 ONE
0.56050886 ONE
0.05605063 ONE
0.33630506 ONE
1.62547722 ONE
0.44840759 ONE
0.22420380 ONE
3.36305696 ONE
3 "KYC" transactions
105bf7610d10c42b3b139182961ab1b840ca50d8eca7d95e362d645e77562e2122517412/03/2017 13:41:591250000.00000000 ONE ("mining")
3.36305696 ONE
5.60509494 ONE
0.56050886 ONE
0.61655949 ONE
0.11210127 ONE
3.30700633 ONE
1.09299241 ONE
1.12101899 ONE
3 "KYC" transactions

Thursday, 9 March 2017

Prohibitions and Warnings by Legal Authorities

Legal Authorities - sorted on Country / Publication Date

CountryAuthorityPublication
Date
Publication
BelgiumFSMA - Financial Services and Markets Authority8 July 2016OneCoin not recognized by FSMA
OneCoin not recognized by FSMA (PDF)
BulgariaFSC - Financial Supervision Commission12 October 2015Announcement - OneCoin
ColombiaSuperintendency of Corporations21 April 2016Alert: Onecoin Colombia is not supervised by Superintendency of Corporations
CroatiaCNB - Croatian National Bank7 March 2017OneCoin product carries many risks
FinlandPoliisi - Police of Finland4 November 2015National Bureau of Investigation has investigated OneCoin-virtual money (Finnish)
HungaryNBH - Central Bank of Hungary10 December 2016Increased risk in virtual currencies (Hungarian)
(calls OneCoin a pyramid scheme, mentions Bitcoin too)
ItalyAGCM - Antitrust27 February 2017Pyramid sales: Antitrust suspends promotion of OneCoin by OneLife (Italian)
Full text (PDF, Italian)
LatviaFCMC - Financial and Capital Market Commission11 March 2016FCMC warns of OneCoin services rendered (Latvian)
Information about financial pyramidsn (Latvian)
8 December 2016We continue to warn about services provided by OneCoin
LatviaConsumer Rights Protection CentreFinancial and Capital Market Commission has repeatedly warned about services provided by OneCoin (Latvian)
NetherlandsAFM - Dutch Authority for Financial Markets26 September 2016Warning from foreign authorities
(AFM has not issued a warning themselves)
NigeriaSEC - Securities and Exchange Commission12 January 2017Public Notice on Investments in Cryptocurrencies and other Virtual or Digital Currencies
(mentions Swisscoin, OneCoin and Bitcoin as examples)
PolandOffice of Competition and Consumer Protection13 September 2016Launched official investigation into OneCoin (polish)
SwedenLotteri Inspektionen - Swedish Gaming Board27 January 2016OneCoins activities reported to police for alleged breach of Lotteries Act (Swedish)
UgandaBoU - Bank of Uganda14 February 2017Warning to general public about 'One Coin Digital' Money operations in Uganda
United KingdomFCA - Financial Conduct Authority26 September 2016Beware trading virtual currencies with OneCoin


Other organisations - sorted on Country / Publication Date

CountryOrganizationPublication
Date
Publication
GermanyDer Spiegel3 June 2016Financial regulator BaFin checks Internet currency OneCoin
NorwayDSA - Direct Selling Association (Direktesalgsforbundet)3 March 2016Will not be a police officer
(warning against OneCoin - Norwegian)
SwedenGöteborgs Posten22 March 2016Police investigating Onecoin
VietnamTuoi Tre News11 July 2016Deputy head of the competition authority under Ministry of Industry
and Trade said his agency had transferred all information regarding
the OneCoin scheme and Bamboo to Ministry of Public Security
for investigation

Monday, 6 March 2017

Analysis of OneCoin blockchain - Part 10 - Audit Reports

A. Summary of Conclusions
  1. The OneLife company lies by stating that OneCoin is the first company which audits its blockchain by an external, independent auditor. Since 1 October 2016 - the launch of OneCoin Blockchain (simulator) Version 2 - no Audit Reports have been published.
  2. All 18 Audit Reports on blockchain (simulator) Version 1 are invalidated by definition since on 1 October 2016 a new "Blockchain Version 2" started. So even if the Audit Reports would have had any value (they don't), that is no longer the case.
  3. In the first three audit reports of April to June 2015, signed by Dian Dimitrov of Semper Fortis, the token transactions are explicitly excluded. In other words, the "mining process" (although fake) is excluded.
  4. The Audit Reports of July 2015 till September 2016, signed by Atanas Lazarov of S Systems Ltd, explicitly state the following:
    "We accept this data as correct and we hold no responsibility concerning the data correctness".
  5. Both auditors investigated only the OneCoin blockchain and its transactions and apparently did not inquire the origin and meaning of these data
  6. OneCoin Blockchain Version 1, just like Version 2, is a Blockchain simulator, a mimicry of the Bitcoin blockchain explorer on www.blockchain.info. The Block and Transaction data in both OneCoin blockchain versions are completely fake, i.e. it is blockchain simulation software with fake data in separate database tables. But by ASSUMING that these data were meaningful, both auditors were able to write their meaningless and useless positive "Opinions" without lying.
  7. During an interview with Ruja Ignatova, the auditor of Semper Fortis Dian Dimitrov openly complimented the centralized concept of OneCoin, by stating that it combines all the advantages of cryptocurrency with the advantage of the "central usage and mining and whatever". He also saw a "potential for growth" and stated that OneCoin was the "market leader".

    Mr. Dimitrov showed an appalling lack of knowledge and professionalism by completely ignoring at least three major disadvantages of a centralized/private blockchain:

    a. Because the software is not open source, members have no insight in what happens behind the screens. For instance, nobody can check the correctness of the statement that the OneCoin company does not "premine" and that the mining is done completely by members.
    NB: currently the company is collecting a very large amount of OneCoins anyway, because members are exchanging them for OFCs, Options for Future Certificates, to prepare for the IPO (Initial Public Offering) in Q2 2018.

    b. In a distributed blockchain with a real cryptocurrency all "nodes" can check and decide upon the correctness of each transaction. However, the OneCoin company controls everything. In case of conflicts it can freeze accounts, confiscate balances on OneCoin, Cash and Token Accounts (and it has already done so).
    NB: Recently we found that the complete Transaction History in the Cash and Trading Accounts has been erased (except for the last 30 days).

    c. Because of the centralized design, OneCoin will never be suitable for a peer-to-peer payment system.
    Note the inconsistency with the definition on their own website https://www.onecoin.eu/en/cryptocurrency. OneCoin itself will always be a required "third party".


    d. The OneCoin company is a Single Point of Failure. If this company collapses (which in our opion will happen directly after the IPO in 2018 Q2 at the latest) there is no backup facility at all, all transactions and all accounts will be lost.


B. Objective and Procedure 
The aim of this analysis is as follows:
  1. Study all Audit Reports which are available in the onelife.eu backoffice and assess the Objectives and Scope, Work performed and Opinion (see section Information Center > COMPLIANCE > AUDIT).
  2. Watch the videos on YouTube channel OneCoin (the official channel) with Semper Fortis auditor Dian Dimitrov (the interview with Ruja Ignatova and the Audit Presentation during the Dubai Gold Rush Event) and check the consistency with the audit reports.
  3. Verify whether the Opinions of the auditors comply with the characteristics of the OneCoin Blockchain explorer Version 1, i.e. the version which was active before the launch of Version 2 on 1 October 2016. 

B.1. Information supplied by the OneLife and OneCoin companies
The Compliance page on www.onecoin.eu page contains the following information:

The FAQ Compliance & Security on onelife.eu contains the following question and answer:

C. Fact Finding and Analysis - Audit Reports April 2015 to June 2015

C.1. Audit presentation Dubai Coin Rush Event, 15 May 2015
We start with 60 epic seconds of video footage.

Pathological liar, OneCoin Founder and Visionary Dr. Ruja Ignatova introduces Dian Dimitrov (YouTube link), Lead Auditor of Semper Fortis, during the Dubai Gold Rush Event on 15 May 2015.

After an introduction about Semper Fortis and Moris International, Dian Dimitrov gives a summary of the procedure, the findings and the conclusion of the audit (YouTube link)

NB: at the bottom of this article you will find the complete transcript of this presentation.


C.2. Presentation slides and OneCoin Blockchain screenshots
Of course we don't know exactly which blockchain data the Semper Fortis auditors have seen. 
We do however know that "Blockchain explorer Version 1", which was visible in the onelife.eu backoffice before 1 October 2016, had the same nonsensical characteristics as Version 2, because it did NOT represent real OneCoin transactions. Version 1 was a Blockchain simulator, a fake mimicry of the Bitcoin blockchain explorer on www.blockchain.info, just like Version 2.

We illustrate this conclusion by means of a number of official presentation slides and screenshots.
This is a slide from the official OneCoin presentation used in 2015.
  • "Like all cryptocurrency to come into existence OneCoin has to be MINED. Mining means the creation of new coins by the users. There are only 2.1 bn OneCoins that can be found. Once all of them are found, no new coins can be created. ALL OneCoins will be mined by its users – OneCoin is not a premined currency!

    Coins are mined, by users joining a mining pool, where with joint resources a complex algorithm/puzzle is being solved. Once a solution is found, the mining pool is awarded a reward – in OneCoins. The more OneCoins are mined and the more users join the mining, the more difficult, time and resource consuming mining becomes."


In contrary to this "mining in pools" and "receiving the cryptocoins in the user's E-wallet" the OneCoin blockchain explorer showed only one transaction for 10,000 newly mined coins during the first months.

This screenshot of Block Height 2 until 7 was published on Facebook OneCoinOfficialPage on 22 January 2015`, two days after the "mining" of the first 60,000 coins.

According to this announcement, the mining for all members would start four days later on Monday 26 January 2015.


Block #246 - #251 (probably created in January 2015)

Block #2900 - #2905  (created in period January 2015 till April 2015)

C.3. Analysis of Audit Report April 2015 
Complete versions of some audit reports can be found by Googling on "onecoin audit report semper fortis":
NB: we did not upload these documents ourselves, so any request to delete them is useless.

We show the main parts of the first Audit Report of April 2015.



The most remarkable statement in the following paragraph III. Engagement Objectives and Scope is the exclusion of token transactions from the scope. In the world of OneCoin tokens are used for "mining".

NB: This OneCoin mining process has nothing to do with the mining of real cryptocurrencies.
Mining OneCoins means: divide the number of tokens (submitted for mining by a OneCoin member) by the Difficulty Factor => the result is the number of OneCoins the member receives.

We regard the decision by the auditors to exclude the mining process from the scope of the audit a gross negligence. During the first months, this was the only relevant process related to the blockchain. This decision alone makes the Audit Reports completely meaningless and useless.

NB: Trading by members via the internal exchange started on 15 June 2015 (see Facebook announcement OneCoinOfficialPage )

We have determined the following facts ourselves regarding Blockchain Version 1 as well as Version 2:
  • Each block contains one (and only one) transaction for the "mining" of OneCoins, 10,000 per Block in Version 1, 50,000 per Block in Version 2).
  • There is a consistent, unbroken sequence of blocks, connected by NEXT BLOCK(S) and PREVIOUS BLOCK hyperlinks.
  • Addresses have a OneCoin Balance which takes into account input and output amounts of earlier Transactions regarding each address. There are no "double spends".
This is why we assume that the auditors did not lie here when they considered the blockchain data on its own:

C.4. Interview Dr. Ruja Ignatova with auditor Dian Dimitrov
In May 2015, after the production of the first Audit Report, auditor Dian Dimitrov gave an interview to Ruja Ignatova. At the bottom of this article you will find the complete transcript.
This paragraph contains the most remarkable quotes of the interview (YouTube link). Dian Dimitrov's statements have been used as marketing material by the OneCoin and OneLife companies.
  • 6 minutes, 8 seconds:
    DD: Well, this is where audit business worldwide goes, actually it's a third independent opinion on something, in this case the consistency of blockchain of what we are talking. So even if you are not obliged by a law or anything to be audited, it puts a big amount of trust, if you have somebody third-party independent from the company, to assure the world that something is true or false.

  • 14 minutes, 42 seconds:
    RI: My last question maybe, where do you see OneCoin, where do you see the future of OneCoin, how do you see us, because you know us quite well now as a company, you spent quite a lot of time with us, you spent a lot of time in our IT and it is interesting for us.

    DD: Well I think that OneCoin is the other level of cryptocurrency, simply because so far the cryptocurrencies are decentralized, meaning that there are a lot of potential for fraud, for things like this, and OneCoin is the first centralized actually cryptocurrency, so it combines in synergy first all the advantages of cryptocurrency and second the advantage of the central usage and mining and whatever, the center activities of the coin. So what I see is quite a potential for growth here and being the market leader as far as I know, I really can't find any other companies to be honest I think, being the first have its advantages, really.

C.5. OneCoin company presentation on the April 2015 Audit Report
These are the pages with a presentation made by the OneCoin company.

Note the comments highlighted in yellow. These (slightly twisted) statements by Dian Dimitrov are used as marketing material. In our opinion, he asked for it.
You can download the complete version here: OneCoin Blockchain Audit May 2015 (SlideShare link)





C.6. Termination of contract between One Network Services Ltd and Semper Fortis
Semper Fortis produced only three Audit Reports (from April 2015 till June 2015). After that S Systems Ltd took over this job.

We have no idea about the reason for the cancellation of the contract between Semper Fortis and One Network Services Ltd. We also don't know which company took the initiative, but in our opinion a professional company like Semper Fortis should never have accepted this risky "challenge".

Two of the certificates, visible in the YouTube video with the interview:


D. Fact Finding and Analysis - Audit Reports July 2015 to September 2016
D.1. Info about the S Systems Ltd company
In contrast with Semper Fortis, which is a member of a large concern (Morison International), S Systems Ltd is a "one woman company".

We found the company in the Commercial register of Bulgaria. It was registered in October 2009.

Same page, translated with the help of Google Translate:

D.2. Info about the www.s-sys.eu website
Just like the company, the domain name of the website is registered in October 2009 ( https://whois.eurid.eu/en/?domain=s-sys.eu )

The company does not suffer from a lack of ambition ( http://www.s-sys.eu/?page_id=4 ):

The description of Information Services is quite unique ( http://www.s-sys.eu/?page_id=104 ):

D.3. Analysis of Audit Reports July 2015 until September 2016
A complete version of an audit report can be found by Googling on "onecoin audit report s systems ltd":
NB: we did not upload this document ourselves, so any request to delete it is useless.

We show Page 2 and 3 of the first Audit Report made by S Systems Ltd in July 2015 (Page 1 is only a front page with a S SYSTEMS logo and month plus year). Note the explicit statement (assumption) about the data correctness:

All reports from July 2015 until September 2016 contain the same stamp and signature:

Quote from the July 2015 audit report:

"Our tests are performed on the data provided to us by One Network Services Ltd. We accept this data as correct and we hold no responsibility concerning the data correctness. Our engagement is based only on the data provided by the Client and n third party sources are used.".

In particular the red text is relevant. The auditor assumes that the Blockchain data supplied by the One Network Services company represent real/genuine transactions, while our analysis proves that these data are fake.

Considered on its own (i.e. ignoring that the data are completely fake) the block and transaction data are consistent indeed. For instance, each block in Blockchain simulator Version 1 contains 10,000 newly "mined" Onecoins. Transaction inputs and outputs match as well. Each block has a hyperlink to the previous and the next block.

Block #29989 - #29994  (created in August 2015)

Block #55903 - #55908 (created in February 2016)


E. Overview of all Audit Reports


F. Transcript of Audit presentation by Dian Dimitrov in Dubai

Audit Presentation by Dian Dimitrov (YouTube link)

So about the engagement, that was enough for us, about the engagement, what we have actually doing - it's quite small so I'll try to read - but what is the engagement in brief. The engagement have two quite precise objectives, so it's a technical engagement.

I guess everybody knows how the cryptocurrency works. It doesn't matter if it's OneCoin, Bitcoin or whatever.
So the first thing we have are transactions, meaning that somebody is giving the cryptocurrency to somebody else, or is mining this, the so-called basecoin transaction. So up to April there was no inter-user transactions, there were only basecoin transactions, meaning you just mine the coins and they point to you. But the first thing that you can see here in the objectives, is the assessment of the consistency of the blockchains, uh of the blockchain, it's just one blockchain.

And the second major objective here is verifying that no coins are mined, it actually should say "mined, or a subject of transaction" outside of the blockchain.
So what we have done, we have, the first thing you do as an auditor, it doesn't matter if it's a cryptocurrency audit or statutory financial audit, it doesn't matter, you need to understand the client's business in order to do your job in a proper way.

So we have spent quite time, I met my colleagues in OneCoin's offices, we saw everything starting from the hardware, servers etcetera, going through the source code and things like this (*inaudible*) with your role organization on this, in order to start automating testing, you don't do this by hand, you need to do it by computer, it's quite complicated calculations. But anyway, what we need to do is to say that each and every transaction is valid, meaning that its inputs and outputs, because one transaction's output are the next transaction's inputs, are intact and they can be traced back to the very first transaction.

And the next thing is the transactions being grouped in blocks and forming the blockchain, form such a blockchain that it could be verified to the very first block. So it is not altered and it contains all the verified transactions. And we have done this for April, the current height of the block in the block transaction was number 9,300 and what I saw today for May, it's about 15,700 something, so it's almost doubled in one month, the mining. So in our opinion all the transactions are valid and could be traced to the very first one, and the blockchain is consistent, meaning that there are no alternations in it.
Meaning these two things, they mean that there are no coins outside of the blockchain, which pretty much means is, when you log into accounts and see the blockchain, there is a button on the right side saying blockchain, what I see as transactions and as blocks contains valid information that can be traced to the very root of it.

And we say this for April for block height 9,300 and this engagement, it's on a monthly basis, so each month a certificate and the report would be issued to OneCoin. I don't know if they're going to publish it, yeah, Miss Ignatova just confirmed, so the report and certificate will be published. So in this certificate you will see this type of opinion and I hope this will be the only type of opinion, verifying the consistency of the blockchain up to a block of certain height, it depends on the mining activity, which I see is quite big.

So why we took this engagement, it's actually quite an innovative product and I don't know any, I asked all the Morison internationally if there is something like this and I believe OneCoin is maybe the first one that is a client of an auditing company, in order to verify their transaction, so thank you for this.

It's quite, it was quite a challenge, because I don't think that there are many people that have done this over the years, because cryptocurrencies are on the market till nineteen eighties (???) but it's the first one centralized actually what I see, so again congratulations on this.

And this is what I can say as of today and up to 9,300 height block.

So you can always contact us, our details are in the presentation and depending on the number again, I guess you have it, the presentation, and depending on the number of requests, I must apologize it could take us a week or so to answer, it really depends on the activity, usually we will answer it same day, but I don't think with such a great number of people we'll manage it. So apologies if we don't manage to do it next business day, I'm very sorry and thank you all. And I must congratulate Miss Ignatova, all the OneCoin network and all the staff we've been working with. What we can do here is something really new, something really interesting and we are really proud to be part of an engagement to audit it.

So good luck to everybody and if you have any questions, you know where to find us. See you.


G. Full transcript of interview Ruja Ignatova with Dian Dimitrov

interview Ruja Ignatova with Dian Dimitrov (YouTube link)

Good afternoon ladies and gentlemen, my name is Ruja Ignatova, I'm the founder and the CEO of the company OneCoin. OneCoin is a cryptocurrency and we have been extremely successful in the last months. We started actually softly in the end of September and mined the first OneCoin end of January. Since then a lot of things have happened, a lot of things have happened in the network. We have been growing very very fast, we mined over 100 million OneCoins.

And today I have something very very special for you. I would like to have a short conversation with a very special person here, who is our auditor and who has audited the OneCoin blockchain. So today I will ask Dian a few questions and he will give us some answers and I hope that all of you after this conversation can understand what an audit is, learn a bit more about the blockchain and see that OneCoin is a real cryptocurrency and that we can all trust in this cryptocurrency and the future is very bright ahead of us. Thank you very much for your attention.

Maybe you would say a few words about you, who you are, what you do and about your experience.

DD: Well hello everybody, my name is Dian Dimitrov and I am the Managing Partner of Semper Fortis, an audit and advisory company, part of Morison International. What we do, we audit and advice lots of companies, starting from IT audit, statutary audits, internal audit, pretty much any type of audit you can imagine, and advisory services. So this is who we are and what we do. Our company is in top 10 in Bulgaria and Morison International is in the top ten associations in the world actually, with hundreds of employees and hundreds of millions of dollars of turnover, so pretty much this is who we are.

RI: So what our people always want to know, are you an employee of OneCoin or are you independent?

DD: No neither I, nor any of our partners, associates or any of our employees are part or have an interest in OneCoin. This is a matter of ethical code we sign. With each certificate, with each audit certificate to gain, so no, we are not and we can not be part of our clients companies or have any interest in them.

RI: Now, how many companies do you audit per year, what is your the experience in auditing?

DD: Well, it depends on the types of audit, but a couple of hundred per year in Bulgaria as Semper Fortis and in the Association there are thousands and thousands of companies being audited by our member firms.

RI: So I don't know if you have audited other cryptocurrencies, or how this is, how come that, is it common practice to audit cryptocurrencies?

DD: Well, no it is not actually, OneCoin is quite unique because it's unknown, the cryptocurrency usually a decentralized more though and simply there is nothing to audit centrally and with the decentralized currencies we have all the blockchain available for everyone, so there is no need of audit like the one we have performed. So for us OneCoin is the first company we audit and I don't think that in worldwide scale there are many more. Actually OneCoin is the first one I have ever heard of using centralized work managing cryptocurrency.

RI: So this is actually also something that I made as an experience, when we started off in searching for somebody to audit the blockchain, we talked to many companies to audit it and everybody said this has not been done before, this is innovation, this is something very very new.

DD: Yep, that's why we stepped in the engagement, because it's unique and actually it is a challenge and it comes from our background, actually partners of our company, the founders of Semper Fortis were both computer engineers. Yeah, before being accountants we were actually computer engineers, that's why we took the challenge, it was, it is quite interesting, doing this.

RI: So this is a unique combination between IT and financial audit, interesting. Now what does this audit mean, because you know we, are not accountants, we would like to understand more.

DD: In general, no matter what kind of audit you make, either it's a statutary financial audit, if it's IT audit, information system audit or whatever, the audit exercise is a structured way of applying certain procedures in order to express a statement of whether something is or is not true. So more or less this is what audit is, so what is done in the process of auditing, we have a certain assertion, for example the blockchain is consistent, as in our case, we design certain procedures in order to gain reasonable assurance that this statement is true or false. So this is what audit is.

RI: So if I understand correctly, your audit means that you can go and tell the people, okay what the blockchain shows is true or not true.

DD: Yeah, yeah, put in a simple way yeah, it is, it is what we do actually.

RI: So actually this audit is something that we wanted to do, because we decided to go with OneCoin in a centralized way first. We did not put the code in an open source, because we have a network of customers and we, in the beginning mine the coin actually only with the network and only with our customers. So of course our people trust us and they do a very very good job, but I think that trust is something good but it's always good to have some control also in the, in the process.

DD: Well this is where audit business worldwide goes, actually it's a third independent opinion on something, in this case the consistency of blockchain of what we are talking. So even if you are not obliged by a law or anything to be audited, it puts a big amount of trust, if you have somebody third-party independent from the company, to assure the world that something is true or false.

RI: So how many audits do you need to make, or how do you know if the transactions are really everything is okay, what do you need to do?

DD: Well, what you need to do is strictly algorithmic work, which I can explain of course in details, but I think it would be quite boring. But more or less the model of OneCoin is pretty similar with Bitcoin, so what is done is, we check if every block consists of the transactions that are stated and if the blockchain is consistent, meaning that each and every block follows the one before it and there is no alternation in the blocks. So this is what we do.

RI: So what you say is, if I understand correctly, just to say it simpler, you check if we mine outside the blockchain, or if all coins are in the blockchain. So whatever we show is actually really mined and we don't mine more or less coins.

DD: Yeah, you can put it this way. Actually to be more precise, the first thing that chose in the audit, that there are no coins outside of the chain. There are no more or less coins then stated, and each and every transaction is true and consistent. So in a simple way this is a what the audit needs to prove.

RI: Now of course all our user outside want to know what came out of the audit.

DD: Well what happens, the product of an audit is an audit report, stating that certain statement is true or false. In this case, what is our task according to the contract between Semper Fortis and OneCoin, there are no coins mined outside of the blockchain, first, the blockchain is consistent, meaning there are no alternations in the blockchain and what the users see on their website or interface or whatever you call it, is the same thing that happens actually background. So these three or four things are what is stated in the report.

RI: So everything is okay in our blockchain.

DD: Yeah yeah it is, it is.

RI: Now another question, because you did now an audit, this audit was perfect and everything was okay, however I guess that this audit should be done in a regular basis.

DD: Yeah, it is actually is done monthly. Up to now we have audited the blockchain up to block number 9300 and which will be the next block at the end of April, May, June, July of whatever, it depends on the activity actually of the users, but it will be done on a monthly basis and in the end of each month we shall report.

RI: Okay, can you explain a bit more in detail how do you audit this blockchain, what do you do, how does your day-to-day work look like.

DD: Well, first of all maybe a little bit of explanation what a blockchain is actually. First of all, each and every activity is called a transaction. Each and ... a certain number of transaction is packed into a block, then this block is hashed, meaning that you calculate a certain string of digital numbers and then you go to the next block. The next block is using the hash from the first one, plus the transactions included into it, meaning that you cannot hash the previous block without having information for the previous one. So this is actually how the blockchain is done and what the blockchain consists of, this is each and every transaction that have ever happened in the OneCoin, or whatever cryptocurrency actually, it's general principle, it's not dependent on either it's One, Bitcoin, Litecoin or whatever. So what you do are two things in audit, audit in general, not just the OneCoin.

The first thing is the so-called substantive procedures, meaning that you do detailed tests on certain blocks, certain transactions, certain database entries or whatever. And the next thing is analytical procedures, meaning that you search certain dependencies, not only in the blockchain, but in the system as a whole.
Of course it's audit approach, you have a number of tools and techniques, for example meeting people, asking them certain things in order to understand the business, the first thing you actually do with a client, no matter what is the audit or the client, the first thing you do is understanding its business. Then you go to these details, detail testing and analytical procedure.
You examine hands on whether things happen. You of course do tests on using algorithms designed by us, which are part of the engagement and after all this is done, after you actually gather enough evidence to state that something is true or false, you should report. So this is pretty much what is done in an audit process.

RI: Actually you spent quite a lot of time in our office, with our IT team.

DD: Yeah, yeah, actually we did and it's because, OneCoin is something unique. It's something we have never seen before, so we really needed some time.

RI: So now after you finish this first report, everybody wants to see, what came out of the audit, how will this work, how will this look like.

DD: Well it, after the report is issued, we give it to you and it's up to you if you will publish it or not.

RI: Well, we will publish it ... (inaudible)

DD: You are the client, you have the report and you can do whatever you like with it.

RI: Very very good. We will show also an example of this report, which is very very interesting.
I think cryptocurrency is actually a very very interesting part of business and there have been many famous people now commenting on cryptocurrency. Bill Gates say that it's the future of payments and I think it's very very important, the trust part of cryptocurrency, because if done well and if done in a good way this part of finance in my opinion can become something like a second banking system. I can send so much easier money from one point to the other in the world and if people trust the system, it's something unique.

DD: Well, I think it will not be a second banking system, but it will be the next banking system actually. Simply because, first of all it's very easy to use of course, but it has something unique, actually cryptocurrency gives back the golden standard. You can mine a finite amount of coins actually, it doesn't matter if it's OneCoin or whatever cryptocurrency, the algorithms are set so that you actually cannot mine infinite number. So it's no more fiat money actually, you can return the golden standard in this.

RI: Also wat is very interesting is, we have sometimes a waiting list for the mining and what people sometimes do not understand, that I cannot issue more coins faster.

DD: Yeah, this is why you cannot dig infinite amount of gold, that's the idea so yeah, there is a waiting list and actually this is the strongest, because the easy of use, you can use very easy the fiat money, you can give your credit card or whatever card, checks, so there is, there are another easy ways of transactions, but the cryptocurrency is unique with this. It actually gains more and more value as time passes, simply because it's not infinite. You can of course split it by halves, tens, millions but it's too a finite amount.

RI: My last question maybe, where do you see OneCoin, where do you see the future of OneCoin, how do you see us, because you know us quite well now as a company, you spent quite a lot of time with us, you spent a lot of time in our IT and it is interesting for us.

DD: Well I think that OneCoin is the other level of cryptocurrency, simply because so far the cryptocurrencies are decentralized, meaning that there are a lot of potential for fraud, for things like this, and OneCoin is the first centralized actually cryptocurrency, so it combines in synergy first all the advantages of cryptocurrency and second the advantage of the central usage and mining and whatever, the center activities of the coin. So what I see is quite a potential for growth here and being the market leader as far as I know, I really can't find any other companies to be honest I think, being the first have its advantages, really.

RI: I must say that we also are very very happy how we are moving, today with unofficial data we are something between number four and number five in the world, however my goal was as, I said in the beginning, and everybody was actually laughing at me when I was saying this, that we would like to be top three and with top three, I never say number three, you know, top three, I want to be one of the big players and just to create something unique and something big, which is like something that matters.

DD: Actually I must admit that the first time your COO sent me the presentation, I really was not believing that you can be in top three, but now I see it's quite true actually, so I must say I was an unbeliever at first.

RI: Thank you so much for your time, it was really a pleasure talking to you. We will publish the audit report, we will publish also some contact information where maybe some of the users, if they have some questions about this, might contact you.

DD: It's actually the last page of the report.

RI: Oh very nice, amazing, so they can do this. Of course it takes you always a bit of time to reply, it is not reply on the spot, but it's very very nice that you will do this and yes, then we're looking forward to next month, to the next audit report, and ...

DD: Yeah, the next one will be end of May, so thank you.