The founders of OneCoin, Konstantin Ignatov and his sister Ruja
The founders of OneCoin, Konstantin Ignatov and his sister Ruja Ignatova, were recently charged with multiple counts of fraud by a United States District Attorney.
According to an announcement published by the U.S. Attorney Office of the Southern District of New York, the siblings have been accused of “wire fraud, securities fraud, and money laundering offenses,” and allegedly they have made false promises to investors and accumulated billions of dollars worth of investment for the company.
Reports claim that the siblings were trying to market a fraudulent digital currency called “OneCoin” and investors were lured in, to make their contributions to this currency. The two have been arrested on March 6, 2019, in Los Angeles.
The project was started back in 2014 and is established in the capital city of Bulgaria, Sofia. It is sort of like a pyramid scheme where the members receive commissions for bringing in more potential investors who would be willing to buy the cryptocurrency packages. The OneCoin community boasts a 3 million strength all across the world.
Manhattan U.S. Attorney Geoffrey S. Berman made the following comment with respect to the charges:
“As alleged, these defendants created a multibillion-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 victimized while the defendants got rich. Our Office has a history of successfully targeting, arresting, and convicting financial fraudsters, and this case is no different.”
Ignatov was trying to keep his cover intact from the very beginning. At an investor meeting in Las Vegas, when he was asked about when OneCoin members could “cash out” their cryptocurrencies, he said “if you are here to cash out, leave this room now, because you don’t understand what this project is about.”
New York County District Attorney Cyrus R. Vance, Jr. said:
“these defendants [the Ignatovs] 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.”
According to the investigation, OneCoin generated 3.353 billion euros ($3.769 billion) in sales revenue and earned “profits” of 2.232 billion euros ($2.509 billion) between the fourth quarter of 2014 and the third quarter of 2016.
We are yet to see if the two plead guilty to the charges brought in against them.