Thursday, 04 June 2020

US Govt says cooperation of OneCoin leader Konstantin Ignatov not yet complete

The Government requests that the sentencing date for Ignatov be adjourned for approximately three months.

The proceedings against fraudulent cryptocurrency scheme OneCoin and a number of individuals linked to it continue at the New York Southern District Court.

Recent information about OneCoin’s leader Konstantin Ignatov has been scarce. The documents about his plea change and cooperation with the US authorities remain under seal at this point. Among the facts that are known to the public is that he testified in the trial of OneCoin’s co-conspirator Mark Scott.

On April 6, 2020, the US Government filed a Letter with the Court. The document, seen by FinanceFeeds, concerns Ignatov.

A sentencing control date is presently set in the case against him for April 8, 2020 at 11:00 a.m. Because Ignatov’s cooperation is not yet complete, the Government requests that the sentencing date be adjourned for approximately three months.

In addition, given that Ignatov testified publicly in the trial of United States v. Mark S. Scott, the Government requests that several documents be unsealed: the Government’s letter dated July 18, 2019; the October 4, 2019 change of plea transcript; the Sealed Superseding Information; the waiver of Indictment; and the October 8, 2019 sealing order. The defense has consented to this application.

Konstantin Ignatov, the leader of OneCoin Ltd., a company marketing a purported cryptocurrency named “OneCoin,” was arrested March 6, 2019, at the Los Angeles International Airport. He is charged with wire fraud conspiracy, which carries a maximum sentence of 20 years in prison.

Together with his sister Ruja Ignatova and others, Ignatov made representations about OneCoin, and, as a result, victims invested billions of dollars worldwide in the fraudulent cryptocurrency.

According to the allegations contained in the Complaint, starting in late 2017, Ignatov, assumed high-level positions at OneCoin, rising to the top leadership position by mid-2018.

OneCoin Ltd. operates as a multi-level marketing network through which members receive commissions for recruiting others to purchase cryptocurrency packages. This multi-level marketing structure appears to have influenced rapid growth of the OneCoin member network. Indeed, OneCoin Ltd. has claimed to have more than 3 million members worldwide, including victims living and/or working within the Southern District of New York.

Among a number of other representations, OneCoin Ltd. has claimed that the OneCoin cryptocurrency is “mined” using mining servers maintained and operated by the company, and that the value of OneCoin is based on market supply and demand. In fact, the value of OneCoin is determined internally and not based on market supply and demand; and OneCoins are not mined using computer resources.

Additionally, OneCoin Ltd. has claimed to have a private “blockchain,” or a digital ledger identifying OneCoins and recording historical transactions. The investigation has revealed that OneCoin lacks a true blockchain, that is, a public and verifiable blockchain.

Furthermore, Ignatov has repeatedly represented that an “initial public offering” of OneCoin would occur on various dates in 2018 and 2019, in an effort to generate excitement and solicit additional investments from member victims. However, the purported offering was repeatedly postponed, and no such offering has taken place.


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