Status conference in lawsuit against OneCoin leader gets adjourned

Maria Nikolova

The conference, initially scheduled for August 16, 2019, is adjourned to September 6, 2019.

As the criminal proceedings targeting Konstantin Ignatov, the leader of fraudulent cryptocurrency scheme OneCoin, continue at the New York Southern District Court, some formalities are on the agenda now, such as status conferences and hearings.

On Monday, August 12, 2019, Judge Edgardo Ramos endorsed a Letter by the defense counsel, who asked for the adjournment of the status conference. The conference, initially scheduled for August 16, 2019, is now adjourned to September 6, 2019.

Let’s recall that, in June, a Bond Hearing was held before Judge Edgardo Ramos as to Konstantin Ignatov. The defendant’s bond application was denied.

The defense counsel had proposed release conditions including GPS location monitoring of Ignatov and $10 million in cash and properties securing a $20 million personal recognizance bond. Further, the defendant had agreed to pay for 24-hour armed guards to ensure that he does not flee. Only pre-authorized individuals would have been permitted inside his residence. Ignatov agreed not to use cellphones, nor a computer, apart for purposes of reviewing discovery and note taking.

The Government, however, had argued that neither the conditions proposed by Ignatov in his request, nor any other combination of bail conditions, will reasonably assure his appearance in this case or protect the community from the danger posed by him. The authorities noted that Ignatov has no ties whatsoever to the United States, possesses citizenship and other ties to countries that will not extradite to the United States, has engaged in extensive international travel, and has access to massive foreign financial resources.

OneCoin Ltd. operates as a multi-level marketing network through which members receive commissions for recruiting others to purchase cryptocurrency packages. 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.

Ignatov, of Sofia, Bulgaria, is charged with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison.

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