neCoin is a Bulgarian based company founded in 2014 by Ruja Ignatova and her brother Konstantin Ignatov. "Join the Financial Revolution. The First Transparent, Global Cryptocurrency for Everyone" claims OneCoin as it displays its slogan proudly on the homepage of its website.
Its operations follows the format of a basic Multi Level Marketing scheme. (MLM)
Members of OneCoin receive commissions to recruit new members and new members are then required to buy OneCoin crypto packages. With over 3 million active members world wide, this crypto scam defrauded billions from victims all over the world.
In a government press release, Manhattan attorney Geoffrey Berman stated that the OneCoin is a multi billion-dollar company “based completely on lies and deceit." The company promises low risks and high returns for all its investors. It guarantees pure transparency on the Blockchain.
It claims its tokens are mined by servers operated by the company and its price growth is organic. This was all false.
OneCoin Had No Functional or Verifiable Blockchain nor a Public Ledger.
Because OneCoin never revealed anything real to the public, it was easy for the leaders to lie and falsify reports to their investors. Geoffrey Berman then added:
"[OneCoin is] based on smoke and mirrors more than zeroes and ones. Investors were victimized while the defendants got rich.”
Prosecutors allege that Ruja Ignatova and Konstantin Ignatov inflated the value of a OneCoin from half a euro ($0.56) to almost 30 euros ($33.65) as of January this year. In reality, emails recovered from the leaders suggested they planned to “take the money and run and blame someone else for this.”
New York County District Attorney Cyrus Vance declared OneCoin as "an old-school pyramid scheme on a new-school platform.”
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During a conference in Las Vegas with OneCoin affiliates, one member asked when they were to cash out their investments. Konstantin Ignatov's answer was short and brutal:
"If you are here to cash out, leave this room now, because you don’t understand what this project is about."
The Southern District of New York (SDNY) has indicted Ruja Ignatova and Konstantin Ignatov on charges of wire fraud, securities fraud and money laundering through the use of a fraudulent cryptocurrency.
Konstantin Ignatov was arrested at LAX (Los Angeles International Airport) on wednesday and was charged with conspiracy to commit wire fraud. If found guilty, his charges carries a maximum sentence of 20 years.
His sister Ruja, who is believed to be the true mastermind behind this pyramid scheme, is still at large. She also faces charges in China, India, and Germany. China has arrested and charged more than 100 individuals with wire fraud and deceiving investors. They have already successfully convicted many of these fraudsters.
Over $30 million dollars was seized by the Chinese government during this investigation.The Italian authorities also issued out a 2.5 Million Euro fine. India is following in China's footsteps and made arrests on some of the project’s promoters as well.
One Coin promoters in several other countries face fines and/or cease-and-desist orders.
Payment Processors have been Halted by a Number of Different Countries.
Belgium, the U.K., Uganda, Italy, Nigeria, Germany, India, Hungary, Belize, Vietnam, Austria, Finland, Luxembourg, Bulgaria, China and Samoa have been sending out warnings and cracking down on OneCoin Projects since 2016.
It is hard to determine the exact amount defrauded by OneCoin, but between the years of 2014 to 2016, it is estimated their revenue to be around $3.8 billion.
Although investing in crypto projects can be a huge opportunity and gateway to success, one must be careful when presented with investments. Do thorough research and investigate from reviews and white paper before committing to any projects.
There are many criminals disguised as entrepreneurs searching for their next victims with a "get rich quick" opportunity.