The Department of Justice associated with the Southern District of New York rolled out charges against the leaders of a fraudulent cryptocurrency on 08 March.
The Manhattan U.S. Attorney headed by a justice panel announced that Konstantin Ignatov was arrested a couple of days ago on a fraud conspiracy charge arising from his role as the leader of an international scheme that involved the marketing of a fraudulent cryptocurrency called ‘OneCoin’. An indictment charging Konstantin’s sister Ruja Ignatova was also revealed.
The official statement clarified that Ruja was also a founder and original leader of OneCoin. She was charged with wire fraud, securities fraud, and money laundering offense. The statement headlined that as a result of the misrepresentations made by the duo and others regarding OneCoin, many victims fell prey to invest billions in the fraudulent cryptocurrency.
Manhattan U.S. Attorney Geoffrey S. Berman cited –
“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.”
New York County District Attorney Cyrus R. Vance, Jr., said that the defendants had resorted to ‘old-school’ techniques on a new platform compromising the integrity of the financial system and cheating investors. Cyrus urged potential crypto investors to be wary of this unregulated space and scrutinize investment opportunities while being aware of imminent fraud.
IRS Special Agent in Charge John R. Tafur said that the defendants had convinced victims to invest in OneCoin through complete lies about the digital coin. John, however, reassured that the IRS is committed to fighting cryptocurrency scams and would bring perpetrators to justice.
Finally, FBI Assistant Director-in-Charge William Sweeney, Jr. expressed the obvious loopholes of OneCoin stating that the coin only existed in the minds of the creators and their stooges. William highlighted that unlike genuine cryptocurrencies, OneCoin had no intrinsic value. There was no facility for the investors to trace their money and could purchase nothing.
The statement summarized the allegations against the defendants contained in the complaint, other court papers, and public documents. OneCoin lured members by offering commission if they could recommend others to purchase cryptocurrency packages. This fact has been substantiated by the claim that OneCoin has garnered more than 3 million members globally.
The highlight of this nefarious activity was the revelation that OneCoin even lacked a true blockchain. The defendants had purportedly started distributing digital coins to members that did not even exist on the blockchain.