U.S. Authorities Arrest One of the Masterminds Behind OneCoin
New York prosecutors have arrested one of the "masterminds" of OneCoin, accusing him of stealing "billions" from investors through an alleged pyramid scheme.
The U.S. Attorney for the Southern District of New York (SDNY) charged Ruzha Ignatova and Konstantin Ignatov with securities fraud and money laundering, claiming the siblings defrauded investors of “billions of dollars” using a fraudulent cryptocurrency. Konstantin Ignatov was arrested at Los Angeles International Airport earlier this week as part of the investigation.
According to a press release, prosecutors allege that OneCoin is a pyramid scheme where members receive commissions for recruiting others into the project. These recruits are required to purchase crypto packages and OneCoin currently claims to have 3 million members worldwide.
While OneCoin claims that their tokens are mined from servers run by the company and that the price growth is organic, it turns out that neither of these claims are true.
Furthermore, Ruzha Ignatova claimed in an email that she had an “exit strategy” from the company.
SDNY U.S. attorney Jeffrey Berman said that “these defendants have created a multi-billion dollar cryptocurrency company based entirely on lies and deception“, adding:
“They promised great returns and minimal risk, but as alleged, this business is a pyramid scheme based on deception, not numbers. Investors were victimized while the defendants got rich.”
While Konstantin Ignatov was arrested, Ruzha Ignatova remains at large. Another defendant, Mark Scott, was arrested last year in Massachusetts.
Authorities in a number of countries – including Belgium, the United Kingdom, Uganda, Italy, Nigeria, Germany, India, Hungary, Belize, Vietnam, Austria, Finland, Luxembourg, Bulgaria, China and Samoa – have warned about or investigated the OneCoin project since 2016 over similar suspicions of a pyramid scheme or fraud.
Prosecutors in China have charged more than 100 individuals with defrauding investors and successfully convicted several of those defendants. Indian authorities have also arrested some of the promoters of the project.