OneCoin, a known pyramid scheme, scammed investors for $4 billion

09 May, 2019
by Joeri Cant
News
OneCoin, a known pyramid scheme, scammed investors for $4 billion

The $4 billion pyramid scheme, OneCoin, is being sued by an investor who lost $130,000 since she first invested in OneCoin, back in 2015.

OneCoin has been considered a Ponzi scheme, mainly due to its organizational structure and because of many of the people who are central to OneCoin have previously been involved in other similar Ponzi schemes.

OneCoin operated as a multi-level marketing network through which members received commissions for recruiting others to purchase cryptocurrency packages. This multi-level marketing structure appears to have influenced the rapid growth of the OneCoin member network, which grew to include more than 3 million members worldwide at one point.

According to the Block, the investor, Christine Grablis lost $130,000 since she first invested in OneCoin in 2015, and is now seeking class-action status for the lawsuit against OneCoin, to include others who were scammed out of their investments.

The plaintiff's lawyer David Silver told The Block that OneCoin’s principals and promoters duped investors worldwide into a reported $4 billion in investments in a cryptocurrency that never really existed.

'The size of the scam is staggering, as is the audacity of the people who not only pulled it off but who continue to defend it and promote it to this day', he said.

In March, Chepicap reported that Konstantin Ignatov, the current leader of OneCoin, was arrested at the Los Angeles International Airport, on a wire fraud conspiracy charge stemming from his role as the leader of an international pyramid scheme that involved the marketing of the fraudulent cryptocurrency 'OneCoin'.

At the time, the FBI Assistant Director-in-Charge William Sweeney pointed out that OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators.

'Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators. Whether you’re dealing with virtual currency or cold, hard cash, we urge the public to exercise due diligence with any investment.'

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