King of Crypto Empire Arrested for Fraud
The leader of a multi-billion dollar scheme involving the sale of fraudulent crypto-currency OneCoin, was arrested on Friday at Los Angeles International Airport, according to a US Justice Department press release.
Konstantin Ignatov, the current leader of OneCoin, was indicted on a ‘wire fraud conspiracy charge.’ His sister Ruja Ignatova, the founder and original leader of OneCoin, had been charged with “wire fraud, securities fraud, and money laundering offenses.”
The duo duped victims into investing billions of dollars in the fake crypto-currency, utilising “an old-school pyramid scheme on a new-school platform,” stated New York County District Attorney Cyrus R. Vance, Jr. He accuses them of “compromising the integrity of New York’s financial system.”
The crypto-currency was established for the sole purpose of defrauding investors said FBI Assistant Director-in-Charge William Sweeney, Jr., but it was advertised as a product for making faster payments....MORE
“Unlike authentic crypto-currencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything,” he said.
OneCoin also claimed that the crypto-currency was “mined” in the same way as other crypto-currencies, by using mining servers maintained and operated by the company, and that the value of it was based on market supply and demand.
However, the value was determined internally and not based on market supply and demand and OneCoins were not mined using computer resources. OneCoin also claimed to have its own private blockchain – a public and verifiable digital ledger with a record of all transactions – which it did not....
