Justice! Former OneCoin Investor Pursues Class Action against Ponzi Scheme
Positive news released by Bloomberg revealed how a former investor of the notorious scam, OneCoin, would be seeking damages and a class action suit to claim back lost amounts defrauded in the scheme.
Christine Grablis will represent herself and others, according to a complaint filed on May 7, stating that she lost around $130,000 in the scam and further unspecified damages. Furthermore, OneCoin founders Ruja and Konstantin Ignatova have both been charged with wire and securities fraud, and money laundering in March.
According to the official court documents, the FBI also arrested Mark Scott, accused of laundering about $400 million, said to be the proceeds from OneCoin’s nefarious activities.
OneCoin scam was worse than Bitconnect
The project claimed to have over three million members and over $4 billion in worldwide sales. In reality, they were perpetuating a
against its victims, conspiring to defraud innocent people out of billions of dollars.
Court documents revealed OneCoin Ltd was a ‘multi-level marketing network’ that distributed false commission to members for recruiting others to purchase fraudulent ‘cryptocurrency packages’ from OneCoin directly. Members were eligible to claim 10% – 25% commission for each new member purchasing their packages.
The bogus firm stated their coins were mined via their blockchain and value of the coin would be determined by market supply and demand. In actuality there was no blockchain, there were no real tokens. It was all a preconceived malicious scam built on smoke and mirrors. Investigations by the IRS and FBI revealed OneCoin’s weren’t mined using computer resources and the tokens value was pre-arranged by the thieves themselves- programming the coin to ‘rise’ from $0.56 to $33.68 per coin.
“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.”
It is difficult to precisely measure the total impact of the damages caused by the cowards; however, records published by OnceCoin Ltd stated the company made $3.38 billion in revenue 2014 and 2016, with profits of $2.5 billion in the same timeline. If correct, this would make OneCoin’s scam bigger than that of even BitConnect, which infamously defrauded victims over $2.6 billion in 2018.
Audacity of the scammers
If the plan to steal innocent people’s money wasn’t disgusting enough, the sheer brazenness of the founder’s activities provides for further infuriating reading. The court documents also revealed how the founders fully intended to defraud customers from the get-go, and like most criminals had no qualms implicating fault:
“Take the money and run and blame someone else for this….”
Before his arrest and criminal charges, Konstantin Ignatova traveled to the US to attract further victims for their scam. He met with several OneCoin affiliates in Las Vegas between February and March 2019, and when asked by OneCoin members, how they would be able to monetize their OneCoin purchases, Ignatov arrogantly replied:
“If you are here to cash out, leave this room now, because you don’t understand what this project is about.”
Horrible reminder to investors
It’d be easy to assume that following the BitConnect scam, investors would be much vigilant and anxious about investing in these potentially high-earning passive cryptocurrency projects. However, in the regrettable case of OneCoin, millions of investors let their naivety get the better of their assumed initial instinct.
Multi-level marketing and tiered referral systems along with other passive groups offering too good to be true returns are exactly that- too good to be true. They will almost certainly be scams founded by low-level degenerates and are total red-flags; not only in blockchain but also to the broader investment industry.