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Monday, February 17, 2020

Onecoin Leaders Indicted in the U.S. for Operating ‘Fraudulent Pyramid Scheme’

On March 8, the Department of Justice and the U.S. Attorney’s Office Southern District of New York (SDNY) announced that officials have indicted two of the top leaders of the notorious Onecoin project. The prosecutors charged Onecoin cofounders Konstantin Ignatov and Ruja Ignatova with a slew of charges in connection with defrauding investors. Konstantin Ignatov was also arrested in Los Angeles and appeared before a judge in California.

US Prosecutors Charge Onecoin Leaders With Money Laundering and Securities Fraud

This week U.S. prosecutors have indicted the leaders of the infamous Onecoin project: Konstantin Ignatov and Ruja Ignatova. The duo started the project back in 2014 and enlisted a group of others to help spread the Ponzi scheme. Just recently news.Bitcoin.com shared an update update on the Onecoin project and how law enforcement from a variety of countries has been investigating this case. Furthermore, Ruja Ignatova had gone missing and hadn’t been seen in well over a year after purchasing a mansion and yacht. Now the U.S. Department of Justice (DoJ) has informed the public that Konstantin Ignatov has been arrested in L.A. and both leaders are being charged with wire fraud, money laundering, and securities fraud.

“As alleged in the indictment, these defendants executed an old-school pyramid scheme on a new-school platform, compromising the integrity of New York’s financial system and defrauding investors out of billions,” New York County District Attorney Cyrus R. Vance, Jr., detailed. “Our Office urges all crypto investors to scrutinize investment opportunities, recognize the prevalence of fraud in this underregulated space, and proceed with caution.”

Onecoin Leaders Indicted in the U.S. for Operating 'Fraudulent Pyramid Scheme'
Konstantin Ignatov was arrested this week in L.A.

‘Onecoin Lacked a True Blockchain’

The press release published by the DoJ and SDNY is quite damning. The announcement notes that the duo claimed private computers or “servers” mined the purported cryptocurrency named Onecoin. However, the investigators allege the project was nothing more than a “fraudulent pyramid scheme.” “Onecoin Ltd. operates as a multi-level marketing network through which members receive commissions for recruiting others to purchase cryptocurrency packages — Onecoin continues to operate to this day,” the announcement read.

The seething critique of the purported blockchain continued:

Additionally, Onecoin Ltd. has claimed to have a private “blockchain,” or a digital ledger identifying Onecoins and recording historical transactions — The investigation has revealed that Onecoin lacks a true blockchain, that is, a public and verifiable blockchain.

Onecoin Leaders Indicted in the U.S. for Operating 'Fraudulent Pyramid Scheme'
U.S. law enforcement officials say Ruja Ignatova remains at large.

The release also mentioned that by March 2015 Ruja Ignatova and her cofounder told certain members of the Oncoin inner circle that the packages were “fake coins.” According to a transcript of text between one unnamed cofounder the individual wrote: “These ppl are idiots” referring to investors. The law enforcement officials further detailed that Ignatova has disappeared from publicly running the company, but Konstantin still conducted Onecoin business in the U.S. in 2019. The release also mentioned the recent Feb. 17 arrest of Florida-based attorney Mark Scott who allegedly helped the duo launder and wire a large amount of Onecoin’s illicit funds. All three of the individuals are facing a maximum sentence of 20 years in prison but Ignatova remains at large.

What do you think about the leaders of Onecoin being charged in the U.S. for money laundering and fraud? Let us know what you think about this subject in the comments below.


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