The founders of the international cryptocurrency pyramid scheme and an allegedly fraudulent digital currency dubbed as OneCoin has been charged with fraudulent charges by a United States District Attorney.
An announcement for the same was published by the U.S. Attorney Office of the Southern District of New York on March 8. Reportedly, the founders and leaders on OneCoin, Konstantin Ignatov and his sister Ruja Ignatova were arrested on March 6, 2019, in Los Angeles.
The siblings are accused of “wire fraud, securities fraud, and money laundering offences.” They allegedly lured investors to contribute “billions of dollars in the fraudulent cryptocurrency.”
Established in 2014, OneCoin is based in the capital city of Bulgaria, Sofia. The scheme operates in a pyramid structure wherein members receive commissions for attracting other potential investors to buy cryptocurrency packages. Purportedly OneCoin has over three million members worldwide.
When Ignatov was asked about the “cash out”, by the members in Las Vegas, he stated at the time:
“if you are here to cash out, leave this room now, because you don’t understand what this project is about.”
The Manhattan U.S. Attorney Geoffrey S. Berman commented on 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.”
Reportedly, the investigation found that between the fourth quarter of 2014 and the third quarter of 2016, OneCoin generated 3.353 billion euros ($3.769 billion) in sales revenue and earned “profits” of 2.232 billion euros ($2.509 billion).
New York County District Attorney Cyrus R. Vance, Jr. stated
“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.”
The U.S. Department of Justice charged a New York-based operator, Randall Crater of a purported cryptocurrency payment services firm My Big Coin Pay Inc. (My Big Coin), last month, with wire fraud and unlawful monetary transactions. As per the indictment, Crater conducted that four counts of wire fraud and three counts of unlawful monetary transactions, as well as misappropriated more than $6 million in investor funds for personal use.