- The OneCoin siblings Ruja and Konstantin Ignatov are being charged with wire fraud
- The OneCoin team defrauded a total of $3.8 billion from naive investors
- Konstantin Ignatov has pleaded ‘not guilty’ of charges
- Ruja Ignatov is still at large
The cryptocurrency industry still has its flaws in many ways. Ever since its origins, crypto enthusiasts have been facing various threats to their assets by hackers that attack both individuals and institutions, and some in a little more unconventional way, through a Ponzi scheme. These Ponzi Schemes target newbies that are drawn by the sky high returns in the crypto world and these unaware people are easy targets. It is very important to do your own research (DYOR) and hence one can often see this term being used the cryptocurrency community. The OneCoin scam was one such giant Ponzi scheme that affected a huge number of unaware people who lost a lot of their hard earned money.
The history behind the OneCoin scam
The OneCoin scam dates back to 2014. The company was founded by a Bulgarian businesswoman, Ruja Ignatov and her brother Konstantin Ignatov. The company promoted itself as a decentralized blockchain project where funds are stored in a safe and secure way. The scam ran on a multi-level system where users were rewarded commissions for recruiting other people to purchase the cryptocurrency.
The crypto industry was in the spotlight back then, courtesy of Bitcoin whose price was skyrocketing while they ran their scam, and this was a prime time for OneCoin to be the centre of attention among those who have little or no knowledge about cryptocurrencies. The company generated a whopping $3.8 billion between 2014 and 2016. A great many investors were scammed by the brother and sister team.
Pleads not guilty, promises upcoming ICO
The latest court documents released, state that Konstantin Ignatov, has pleaded not guilty of the wire fraud allegations that had been levied on him and his sister Ruja. According to the documents, the accused entered the plea on a preliminary hearing via a conference call on May 28. Even though the ones related to this grand Ponzi have been constantly denying allegations, there is clear proof against them.
According to a Facebook post by Konstantin, the accused claims that during his travel to his homeland Bulgaria all his personal belongings were stolen which included a phone, and this led to the loss of funds and ultimately bankruptcy. The FBI, however, arrested Konstantin on March 6. He is considered to be one of the several masterminds of the grand scheme. Ruja Ignatov faces the same charges but is still at large.
OneCoin was never a cryptocurrency, and many times a lot of scams have nothing to do with actual cryptocurrencies. Many times fiat currencies are used in various illicit activities but that doesn’t make fiat a scam. Unless we see crypto being regulated properly this will be a problem for a long time. Instead of calling cryptocurrencies a Ponzi scheme the government bodies and even individuals must study it before placing any accusations. Although flawed, the technology has immense potential and can revolutionize the way we look at money.