US arrests the mastermind of cryptocurrency pyramid scheme valued at $3.7 billion

The US authorities have arrested a person who is allegedly a leader of OneCoin, a project related to cryptocurrency which is accused of being a pyramid agency instead of functional currency. The fraudster named Konstantin Ignatov was arrested on the conspiracy charges of wire fraud. Another accused Ruja Ignatova who is coincidently Konstantin’s elder is currently absconding. She is accused of securities and wire fraud as well as money laundering.

OneCoin is actually a company based in Bulgaria and was founded in 2014. Despite the recent arrests made, the company is still running in its home country. If the users of this currency were able to convince other people to buy it, then they used to get a certain amount of commission from OneCoin. It followed a concept which was similar to the multi-level marketing scheme. It has around three million members across the globe even though OneCoin has no public ledger or functional blockchain.

Geoffrey Berman who is Manhattan attorney while issuing a press on behalf of government stated that OneCoin founders created this company and made it a multibillion-dollar venture completely on the basis of deceit and frauds. During 2014 and 2018, the company made approximately $3.7 billion in its revenues. Cyrus Vance who is New York County district attorney stated that the accused used an old school pyramid scheme method to boost his venture.  

While conducting their investigations, the authorities found out that OneCoin had claimed to own a digital ledger so that they could record several cryptocurrency transactions. However, it was not public and could not be verified. From 2015 onwards, Ignatova started providing the members with fake OneCoin tokens and asked them to sell it.

Not only in the US, but this company has its fraud activities prevalent in various other countries as well such as UK, India, Germany, Finland, China and Bulgaria where it was founded.

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