OneCoin leader gets moved to New York, preliminary hearing set for April 26th
Konstantin Ignatov has been detained on consent without prejudice, with the preliminary hearing in his case scheduled for April 26, 2019.
There has not been much news concerning Konstantin Ignatov, the leader of notorious cryptocurrency scheme OneCoin, since his arrest in early March this year.
FinanceFeeds’ research shows that the New York Southern District Court and the California Central District Court have finally unsealed some information regarding the proceedings against Ignatov, of Sofia, Bulgaria. The documents show that the defendant has been removed to the New York Southern District Court.
Initial appearance was held more than 20 days after the arrest of the defendant. Ignatov appeared with retained Attorney Jeffrey H. Lichtman, whereas AUSA Kristy Greenberg appeared for the government. The defendant was detained on his consent without prejudice.
A preliminary hearing is set for April 26, 2019.
Konstantin Ignatov, the top 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, 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.