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The CEO of the multi-billion-dollar crypto Ponzi scheme OneCoin, Konstantin Ignatov, has pleaded not guilty to wire fraud as per court documents. He entered the plea on May 28 preliminary hearing via a conference call.
Ignatov and his sisiter Ruja Ignatov were charged with wire fraud, securities fraud and money laundering through their cryptocurrency OneCoin. The U.S. Department of Justice indicted the Bulgarian national for defrauding investors through a multinational Ponzi scheme masked by his cryptocurrency. Ignatov promised guaranteed profits to his investors and then, not surprisingly, failed to deliver.
OneCoin, the cryptocurrency of the infamous Ignatov siblings, was never actually launched. It was actually just a system that logged transactions on an SQL database in the “OneCoin network.” Konstantin Ignatov was arrested by the FBI on March 6 at the Los Angeles International Airport. He was trying to flee the country to his home country Bulgaria.
Shortly before his arrest, Ignatov posted a selfie on Facebook. In the description of the picture, he ironically complained about having his phone and suitcase stolen, despite having defrauded investors out of millions himself. He also said that his visit to the US was one of his worst travels ever. However, it got worst for him from there since he got arrested at the airport by the Justice Department.
OneCoin: The $3.8 Billion Cryptocurrency Ponzi Scheme
OneCoin was a typical Ponzi scheme. It was structured as a multi-level system where participants were rewarded for commissions for recruiting others to purchase the fake cryptocurrency. OneCoin was co-founded by Konstantin and his older sister Ruja in 2014. Ruja served as the CEO until October 2017, when she suddenly vanished from the scene and Konstantin took over the reins.
OneCoin Ltd., generated a whopping $3.8 billion in sales between 2014 and 2016. Scores of investors were robbed out of billions of dollars by the two siblings during that time. OneCoin pretended to be a cryptocurrency company to use the hype generated by the crypto industry in 2014. In reality, OneCoin was anything but a cryptocurrency.
The Department of Justice had this to say about the siblings and their role in robbing the investors of OneCoin:
“These defendants created a multi-billion-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.”
Even as the DOJ lays out charges against him, Konstantin Ignatov continues to maintain his innocence and even pushes news about a OneCoin initial coin offering, scheduled for 2019.