A top leader of the OneCoin Project, have been arrested by US prosecutors for defrauding investors of “billions” of dollars, through a fraudulent pyramid scheme.
Ruja Ignatov and Konstantin Ignatov were charged by the U.S. Attorney for the Southern District of New York (SDNY) of wire fraud, securities fraud and money laundering. The charges adds that the two of them also defrauded investors of “billions” using a fraudulent cryptocurrency.
According to a report by the prosecutors, OneCoin is a pyramid scheme, where members receive commissions to recruit other investors to the project. These recruits are required to purchase crypto packages.
OneCoin currently claims to have 3 million members worldwide. The report also debunked OneCoin’s claim that its tokens are mined by servers operated by the company and that its price growth is organic.
Ruja Ignatova was allged to have said in an email that she has an “exit strategy” from the company.
According to the SDNY U.S. Attorney Geoffrey Berman, “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,” he added
However, only Konstantin Ignatov was arrested earlier this week at the Los Angeles International Airport.
Recall that, another defendant, Mark Scott was arrested last year in Massachusetts. Ruja Ignatova, who is currently at large, also has a case to answer in India for her role in the project.
Governments across the globe have been cracking down on members and promoters of such scheme as the OneCoin project since 2016, with some others discouraging investors through continuous publicity and warning, some of such countries inldude: Belgium, the U.K., Uganda, Italy, Nigeria, Germany, India, Hungary, Belize, Vietnam, Austria, Finland, Luxembourg, Bulgaria, China and Samoa.
With China indicting more than 100 individuals with deceiving investors, and have successfully convicted several of them. Many other country continue to make arrests and also shut down such sheme while placing a fine or a cease-and-desist order to deter prospective investors.