Leader of OneCoin cryptocurrency pyramid scheme arrested by US authorities
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A press release from the US Department of Justice has detailed how one of the leaders of OneCoin has been arrested by American authorities while he was at Los Angeles International Airport. Konstantin Ignatov was charged with “conspiracy to commit wire fraud” and faces a maximum prison sentence of 20 years. Ignatov’s sister, Ruja Ignatova, has had four charges leveled against her but is currently at large.
A third person, Mark S. Scott, has also been charged because of alleged criminal activity in regard to OneCoin’s business. He has been accused of conspiracy to commit money laundering (more than US$400 million according to the DOJ release). Between 2014 and 2016, it is believed OneCoin Ltd. made a profit of €2.232 billion (US$2.5 billion) out of total revenue of €3.353 billion (US$3.77 billion). OneCoin members earned money by encouraging new members to invest in the cryptocurrency. The company claims to have three million members and is still in operation.
Investigation carried out on OneCoin has seemingly revealed that the company has no verifiable blockchain and members were even given a token called “fake coin” by Ignatova. During a meeting with OneCoin members in the USA, her brother reportedly responded to a question about cashing out with the following comment:
If you are here to cash out, leave this room now, because you don’t understand what this project is about.
OneCoin has faced legal issues in a number of countries, including India, China, and Italy. Many other national authorities have started looking into the company’s business activity and have issued warnings about the risks of investing in the scheme.