Altcoin News: The Alleged Leader of the Financial Pyramid OneCoin ($3.7 billion) Arrested
March 11, 2019, by Marko Vidrih on ALTCOIN MAGAZINE
This Wednesday, the alleged leader of the cryptocurrency company OneCoin was arrested at the airport in Los Angeles on charges of organizing a financial pyramid and stealing billions of dollars from investors.
The Prosecutor’s Office of the Southern District of New York (SDNY) has filed charges against Ruja Ignatova and her brother Konstantin Ignatov for fraud using electronic communications, as well as securities fraud and money laundering.
Konstantin Ignatov was arrested on March 6 at the airport in Los Angeles, while his sister Ruja Ignatova is still at large. Note that last year, another alleged member of the OneCoin project, Mark Scott, was detained in Massachusetts.
Ruja Ignatova disappeared in October 2017. It is noted that she was going to leave the company, as reported in a letter to her brother, co-founder of the scheme. Accusations against Ignatova are also being advanced by the authorities of India and China, where major arrests of OneCoin followers were made, which deceived investors. The guilt of most of them was eventually proven.
According to information published on the website of the US Department of Justice, OneCoin is a financial pyramid, in which earlier participants make a profit at the expense of new investors. Representatives of OneCoin argue that tokens are mined on specialized equipment within the company and grow naturally, but the prosecution believes that this whole “cryptocurrency company” is a hoax:
“These defendants executed an old-school pyramid scheme on a new-school platform,” New York County District Attorney Cyrus Vance said in a statement.
The main business model of OneCoin is the sale of training courses in cryptocurrency trading. In order to encourage project participants to attract new people, who must later buy one of the training courses, a loyalty program is provided. All this is nothing but a multi-level MLM-system, which allowed the OneCoin network to develop very quickly.
In other countries, including the United Kingdom, Germany, Belgium, Italy, Nigeria and Finland, regulators from 2016 warn citizens about the danger posed by OneCoin, and try to stop the operation of the scheme on their territory through fines, prohibition decisions and closure of OneCoin cooperating payment systems.
However, despite all these measures, OneCoin continues to function and develop successfully, said the prosecutor’s office in New York. According to the SDNY investigation, only in less than two years — between the fourth quarter of 2014 and the third quarter of 2016 — OneCoin Ltd received €3.353 billion ($3.767 billion) in sales revenue. The company’s profit for the same period amounted to €2.232 billion ($2.507 billion).
Author: Marko Vidrih
