A US District Attorney has announced charges against the leaders of a multi-billion dollar pyramid scheme involving the sale of an allegedly fraudulent cryptocurrency called OneCoin
Konstantin Ignatov was arrested Wednesday at Los Angeles International Airport and charged with conspiracy to commit wire fraud, Manhattan US Attorney Geoffrey Berman said in a statement. Ignatov’s sister Ruja, the founder of OneCoin, was charged with wire fraud, securities fraud and money laundering. She hasn’t been arrested.
Berman said: “As alleged, these defendants created a multi-billion-dollar ‘cryptocurrency’ company based completely on lies and deceit. They promised big returns and minimal risk, but, as alleged, this business was a pyramid scheme based on smoke and mirrors more than zeroes and ones. Investors were victimised while the defendants got rich. Our office has a history of successfully targeting, arresting, and convicting financial fraudsters, and this case is no different.”
FBI Assistant Director-in-Charge William Sweeney, Jr. claimed that OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, it had no real value. “It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators. Whether you’re dealing with virtual currency or cold, hard cash, we urge the public to exercise due diligence with any investment,” he stated.
Mark S Scott
Last month, Coin Rivet reported that a lawyer arrested Stateside in connection with the alleged OneCoin fraud was a director of six companies in Ireland and operated a number of bank accounts there.
Mark S Scott stands accused of laundering approximately $400 million through hedge funds in the Cayman Islands and sending the majority of these funds back to his colleagues.
Ruja Ignatova created OneCoin in 2014 in Sofia, Bulgaria, and fronted the venture until fading into the background in October 2017. Her brother took the helm in 2018. In 2017, the government of Kazakhstan clamped down on the company, labelling it a Ponzi scheme. It has also been the subject of investigations in India and China.
It nonetheless managed to sidestep the controversy and ploughed ahead, claiming earlier this year that its cryptocurrency ONE was “a step closer to being listed on an exchange”.