Last updated on June 30, 2019
U.S. authorities have arrested Konstantin Ignatov, one of the leaders of the crypto scam OneCoin on Wednesday. His older sister, Ruja Ignatova, has been indicted for money laundering, and wire and securities fraud, in an indictment unsealed that day in New York. Again, it was the US authorities that smashed a European scam while the European authorities watched for years. Currently, Ignatova is at large.
The Bulgarian Ponzi Monster
The Bulgaria-based OneCoin was founded in 2014 and still has operations running today, according to the indictment. The OneCoin scheme awarded its users a commission if they could convince others to buy the OneCoin crypto. It was a Ponzi scheme. It claimed to have over 3 million members worldwide, despite having no functional blockchain or public ledger.
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.”Manhattan U.S. Attorney Geoffrey S. Berman (Source: press release dated March 8, 2019)
The prosecutors claim that Ruja Ignatova, the so-called Cryptoqueen, and her co-conspirators willfully and knowingly deceived OneCoin members. The Cryptoqueen is charged with wire fraud, securities fraud, and money laundering offenses. The U.S. authorities regard the scheme’s OneCoin as a cryptocurrency existing only in the minds of its creators and their co-conspirators. No public blockchain supported the OneCoin and hence no immutable ledger and no transparency was provided. It offered investors no method of tracing their money, and it could not be used to purchase anything.
The U.S. enforcement agencies purport to have evidence that Ruja Ignatoves and her partners conceived of and built the OneCoin business fully intending to use it to defraud investors. The perpetrators’ exit strategy allegedly was: “Take the money and run and blame someone else for this.”
Billion Dollar Profits For The Perpetrators
As a result of misrepresentations made Ruja IGNATOVA, her brother Konstantin Ignatov and their co-conspirators, victims throughout the world wired investment funds to OneCoin-controlled bank accounts to purchase OneCoin packages. Records obtained in the course of the U.S. investigation show that, between the fourth quarter of 2014 and the third quarter of 2016 alone, the OneCoin scheme generated €3.353 billion in sales revenue and earned “profits” of €2.232 billion.
The investigation has revealed that OneCoin-derived funds have been routed through a series of purported “investment fund” accounts used to hide the origin of the money, i.e., to launder OneCoin fraud proceeds.
Jail Time For Cryptoqueen
The 38-year-old Ruja Ignatova, a Bulgarian citizen residing in Sofia, is charged with one count each of wire fraud, conspiracy to commit wire fraud, securities fraud, and conspiracy to commit money laundering, each of which carries a maximum sentence of 20 years sentence, and one count of conspiracy to commit securities fraud, which carries a maximum sentence of five years in prison.
Ignatova’s brother, the 33-year-old Konstantin Ignatov, a
Beside Konstantin Ignatov also the U.S. citizen Mark. S. Scott from Florida has been arrested already. He is also accused by the U.S. authorities of being another leading member of the OneCoin Scheme.