Is OneCoin a Pyramid Scheme? U.S Authorities Think So

Wilfred Michael 

Wilfred Michael

News reporter

08 March 2019,
22:47
Is OneCoin a Pyramid Scheme? U.S Authorities Think So

U.S authorities have according to Reuters, arrested Konstantin Ignatov and his older sister Ruja Ignatova, the founders of multi-billion market cap cryptocurrency, OneCoin.

Authorities claim that the OneCoin cryptocurrency which paid users enticing incentives to introduce new users to the coin was used to execute an old school pyramid scheme using a new school platform.

The accusations against OneCoin and its founders are as follows:

  • Creating a multibillion-dollar cryptocurrency company entirely based on lies and deceit.

  • Misleading investors into believing that the value of OneCoin was determined by demand and supply while in the real sense, the cryptocurrency was mined in house and prices controlled by the founders.

  • Laundering $1.2 billion worth of investor funds through 21 while reporting false figures in company accounts.

The report also revealed that pieces of evidence proved that the founders knew that the cryptocurrency was a feud.

In one case, the allegations claim that Konstantin told a co-founder that he was currently cheating on coins and that they could exit the scheme by blaming someone else for the crime and fleeing.

Meanwhile, older sibling Ruja Ignatova has remained relatively anonymous with the project, purportedly going missing in 2017 and returning to start living an extravagant lifestyle off OneCoin’s riches.

Ignatov is now under detention and was charged by authorities for wire fraud while Ignatova was charged with wire fraud, securities fraud, and conspiracy.

What We Know About OneCoin

The OneCoin website has seen little activity in recent times with the last update from the team on January 9, claiming that the cryptocurrency is just one step away from being listed on an exchange, despite launching as far back as 2016.

The project also came under fire in mid-2018 after German regulators charged it for being a pyramid scheme and also not having a blockchain.

Based on these findings, it is clear to see that there are loopholes with the OneCoin project, making it extremely risky for investors.

In a similar development, we reported last week that Police authorities in Hong Kong arrested crypto entrepreneur Wong Chin Kit and an unnamed 20-year old man for defrauding investors through a fake cryptocurrency, Filecoin.

 

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