NY Court grants continuance in case against OneCoin leader Konstantin Ignatov

Maria Nikolova

The negotiations between the US Government and the defense counsel for Ignatov continue.

Magistrate Judge Henry B. Pitman has granted a continuance in the case against Konstantin Ignatov, the leader of notorious cryptocurrency scheme OneCoin. On Friday, the Judge signed an Order to Continue in the Interest of Justice. 

Thus, the New York Southern District Court technically granted a request by the US Government for a continuance of the time within which to file indictment or information from April 26, 2019 to May 27, 2019. In its request, the Government explains that it has been engaged in discussions with defense counsel over a possible disposition of this case. However, the negotiations have not been completed and the parties plan to continue the discussions.

Konstantin Ignatov, the top leader of OneCoin Ltd., a company marketing a purported cryptocurrency named “OneCoin,” was arrested on March 6, 2019, at the Los Angeles International Airport. The defendant was subsequently moved to the Southern District of New York. He is charged with wire fraud conspiracy, with the charge carrying 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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