Co-founder OneCoin crypto scam pleads guilty

OneCoin scam co-founder Konstantin Ignatov pleaded guilty to money laundering and fraud, alongside several other charges. The news was first reported by Matthew Russell Lee, who covers courtroom cases for InnerCityPress.com. Ignatov (right) also provided more details against his still missing sister Ruja Ignatova (left).

The police arrested Ignatov at Los Angeles Airport in March 2019. After pleading guilty he now faces up to 90 years in prison. The court could still charge him for tax violations as well. Ignatov stated in court that his sister fled to Austria and then to Greece, but he hasn’t spoken to her since. Reportedly she’s under protection of an influential Russian citizen.

OneCoin is a Bulgaria-based firm that’s still operational, despite the allegations of fraud. The crypto firm raised over 4.4 billion dollars in something that basically was a Ponzi scheme. Ignatov pleading guilty to the OneCoin scam is something which could — finally — end the illegal business in Bulgaria.

Besides the Ignatov family, a man called Mark Scott was also involved. According to Ignatov he’s responsible for laundering 400 million dollars and routing the money out of the US. The court charged him for money laundering and bank fraud. Scott did not plea guilty, but according to the BBC his case will be closed next week.

Ruja Ignatova’s legacy

According to her brother, Ruja Ignatova first fled from Bulgaria to Austria, after which she moved to Greece. Reportedly she’s under the protection of an rich and influential Russian citizen. Ignatov and Ignatova marketed OneCoin as ‘The Bitcoin Killer’, but never launched any blockchain to actually run the coin.

Their marketing and ponzi scheme made them over 4.4 billion dollars. Some even suggest that the total revenue of the organization was more than 19 billion dollars. OneCoin’s marketing went viral because it’s a commission-driven structure. Low educated people are easy victims. Think about the working class, people from countries in South East Asia, Africa and South America.

Ignatova called herself The Crypto Queen, but she never delivered a working product. The only thing she did, is steal money and do damage to the innovative concept of blockchain technology.

Cryptocurrency scams adapt

The time of scamming with initial-coin offerings seems to be over. These type of investments are supervised by government institutions like the Securities and Exchange Commission. In recent months they have fined several companies based on the way they treated their ICO in 2017 and 2018. For example, EOS founding company Block.One had to pay 24 million dollars. Veritaseum settled for 9.5 million dollars, while Nebulous had to pay 240 thousand dollars.

Alongside OneCoin there’s another major cryptocurrency scam called BitConnect. This infamous ponzi scheme gathered 3.2 billion dollars, powered by a social media referral system. BitConnect promised investors 1% interest on their money per day and that number would increase of they signed up more people into the scheme. An arrest was made in India, unraveling a network of crypto scammers that went all the way up into the political parties.

Where gambling on the streets is always a way to make sure you lose money, so will scams exist in the world of crypto. People launch fake tokens to give investors the idea that they are buying the real deal. Criminals also use cryptocurrencies as ransom. At the same time Twitter is full of fake celebrities who promise you ten times your investment back. Don’t fall for it. If it sounds too good to be true, it’s actually is too good to be true.

Originally published at NEDEROB.