Alleged OneCoin Leader Arrested

New York’s prosecutors have arrested one of OneCoin’s alleged top leaders for stealing billions from investors by running what was actually a pyramid scheme rather than a real cryptocurrency project.

Details of the Arrest

According to the official document that was unsealed on Friday, Konstantin Ignatov has been arrested on charges of wire fraud conspiracy. Ruja Ignatova, his elder sister, has been indicted for wire and securities fraud as well as money laundering.

The Southern District of New York’s (SDNY’s) US Attorney’s office is the agency that has pressed the charges. As part of the office’s investigation, Ignatov was arrested at Los Angeles International Airport early this week. Ignatova, however, has still not been caught and remains at large.

According to the press release, the US Attorney’s office has alleged that the OneCoin project is in reality a pyramid scheme.

A pyramid scheme is where members get commissions for recruiting other people for the project. Recruits are asked to buy cryptocurrency packages to become members of the project. According to OneCoin, it already has more than 3 million members across the globe.

The project also claims that the OneCoin tokens are using servers that are operated by it and that its token’s price growth is organic. However, according to the investigation documents, these claims are lies. Added to this, the prosecutors state that Ignatova allegedly claimed in an email that she already had devised an exit strategy for herself from the company.

The big part of the case against OneCoin is that the project never launched its promised cryptocurrency. Instead of that, a proprietary database (SQL) was used to log transactions on the so-called OneCoin.

Charges from Across the World

OneCoin had already been facing fines as well as criminal action in countries across the world, especially in India and China.

In India, the 22 of the company’s promoters have already been charged with fraud. Similar charges have also been levied against over 100 of OneCoin’s promoters in China, along with warnings against the company issued by the country’s central bank.

Besides these two countries and the US, Austria, Belgium, Belize, Bulgaria, Finland, Germany, Hungary, Italy, Luxembourg, Nigeria, Samoa, the UK and Uganda have also been cracking down on the company on similar charges.

In addition to being charged with fraud and running a pyramid scheme, the company’s payment processors have been shut down by the authorities and its trading system has been targeted for closure too.