Ringleaders of OneCoin Ponzi Scheme Charged in United States

OneCoin Ponzi Scam Scheme
OneCoin – Fake Cryptocurrency Scheme

OneCoin – a ponzi coin scheme lead by Konstantin Ignatov has come under prosecutor radars with the arrest of its top leader at the LAX airport, USA.

Reports show that the scheme propagated by siblings – Konstantin and his sister Ruja; who launched Onecoin in Bulgaria in 2014 and generated about $3.8 billion in revenue by Q3 of 2016. Both had been wanted for multiple charges of fraud and money laundering although Ruja is currently at large.

Prosecutors state that the OneCoin tokens rose from a value of 50 euro cents per coin to 30 Euros despite the digital currency having no blockchain, no utility and no way of monitoring it. All facts clearly known to both founders who schemed investors money using a fraudulent cryptocurrency.

In classic MMM ponzi style, Onecoin relied on a constant flow of money from new investors with the existing members being the chief recruiters and receiving commissions on each new recruit. Onecoin currently claims to have 3 million members worldwide.

However, not quite long, the cryptocurrency media and authorities globally called out the project as an MLM pyramid scheme, but its loyalist members obviously earning some benefits at the time, had the project gain more ground. Then prior to the launch of an initial public offering (IPO) in 2017, Ruja disappeared from public eye in a likely planned exit strategy; with her brother taking up operations in 2018.

On Konstantin’s arrest, Manhattan US Attorney Geoffrey Berman said in a statement:

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.

In same regard, New York County District Attorney Cyrus Vance added:

These defendants executed an old-school pyramid scheme on a new-school platform.

Iganatov had also reportedly travelled to the United States to meet OneCoin investors and while in a meeting in Las Vegas one member asked – when members will be able to cash out their OneCoins? He is alleged to have responded: “If you are here to cash out, leave this room now, because you do not understand what this project is about.” A brutal statement of advice to the con project’s investors.

If found guilty, Iganatov faces a maximum sentence of twenty (20) years in prison, while his sister if caught could face eighty-five (85) years behind bars in the U.S. for her combined charges; as well as extra charges in India for her role in the project.

How to Avoid Ponzi Coin Schemes

Taking cue from highlighted red flags in the Onecoin scheme, here are a few basic checks:

  1. These defendants executed an old-school pyramid scheme on a new-school platform.” – Watch out for MLM schemes and projects with old or similar ponzi patterns which use cryptocurrency.
  2. “No blockchain, no utility and no way of monitoring it” – Basic knowledge of cryptocurrencies would ensure that prior to investing in any coin projects or buying any coins, you look out for the coin’s descriptions, blockchain, products and team behind the coin.
  3. Never buy shit coins – shit coins are coins with no utility or value in the long term. They are basically dummy coins, for every great or potential coin there must be a use, product or need it solves.
  4. Listing Check – Most notable trading platforms like Binance take time to evaluate coins before listing them, so a good check would require you to look up the coin’s rating and on what reputable platforms the coin is listed.

Also see how to avoid crypto scams here.


Written By

CryptoEnthusiast, CryptoEducator, Angel Investor, Writing Pro and Techie