Sentencing of OneCoin leader Konstantin Ignatov gets rescheduled again

The sentencing of Konstantin Ignatov, the leader of fraudulent cryptocurrency scheme OneCoin, has been rescheduled again. On July 8, 2020, Judge Edgardo Ramos of the New York Southern District Court signed an order adjourning the sentencing control date to November 11, 2020.

The order was issued in response to a request by the United States authorities, who said that, because the defendant’s cooperation is not yet complete, the sentencing control date should be adjourned for approximately four months. The defense consented to this application.

Konstantin Ignatov, the leader of OneCoin Ltd., a company marketing a purported cryptocurrency named “OneCoin,” was arrested on 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.