The latest ruling in the OneCoin class action has dismissed OneCoin co-founder Konstantin Ignatov as a defendant after he agreed to testify against his sister. Ignatov is the brother of Ruja Ignatova, the infamous leader and face of OneCoin also known as “Cryptoqueen. Ignatova disappeared in 2017 and since then she has managed to evade the authorities and the general public.
Although Ignatov was dismissed from the lawsuit filed by OneCoin’s defrauded investors, court documents indicate that this same case will continue to target Ignatova. Both brothers remain defendants in another legal action brought by the U.S. Department of Justice, which could see them facing 90 years in prison.
OneCoin founder’s brother agrees to testify against his sister in a settlement under the law
Ignatov, who was arrested on March 6, 2019 in Los Angeles, has spoken out against his sister, claiming that he has had no contact with her since her disappearance and has hired a private investigator to find her, though without much success. About Yavin, the founder and CEO of Cointelligence – a Blockchain technology data and education resource – told Cointelegraph:
“OneCoin investors hoped that by going after Ignatov, who was actually in custody, they would have some chance of recovering at least some of their money. But their decision to drop the case now, after being warned by the court for not providing enough details, suggests that they may have been hasty. I do not believe that this decision in any way suggests that Ignatov is innocent. And I don’t think investors are willing to give up.
With Ignatov being dismissed as a defendant in one of the lawsuits against OneCoin and Ignatova still at large, many are now wondering how OneCoin managed to defraud so many people and what its victims might do. In fact, the sad story of OneCoin has become so popular that it even inspired a television program that is about to come out.
OneCoin: The Story
The story behind OneCoin is full of red flags. Founded in 2014, the Bulgarian-based company followed the typical structure of a multi-level marketing (MLM) scheme, but with a twist. There were no products or memberships to sell; instead, there was a cryptomoney that OneCoin’s promoters claimed was the next Bitcoin (BTC).
Many in and out of the crypto currency community saw through this scam. Those who were familiar with the MLM model quickly realized the similarities in its operation and marketing, and those who were familiar with crypto currencies could clearly see that there was no Blockchain or network. The OneCoin crypto currency was everything, but it was really imaginary. Exhibits of the multi-million dollar pyramid scheme were also published in various media, including Cointelegraph, which reported on it in 2015. Several institutions and government agencies were also quick to issue warnings about OneCoin.
However, the company became very popular over the years, selling membership packages that allegedly contained OneCoin tokens and the possibility of extracting more. These could be exchanged for fiat currency at the Xcoinx exchange, but members could only sell a limited amount determined by the membership package purchased. This move allowed the Ponzi scheme to circulate funds for longer periods of time while appeasing investors to some extent. Yavin commented:
“They convinced their investors that all the warnings were coming from the ‘haters,’ and created an ‘us versus them’ mentality. Another reason OneCoin is still working is that regulators are not doing enough, for example the FCA in the UK is not doing enough to stop people from selling OneCoin and last time I checked a few months ago it was still happening!
OneCoin was known for its ruthless and exaggerated marketing tactics, such as making extravagant productions in which the charismatic face of OneCoin, Ignatova and other promoters talked about cryptomoney to unsuspecting victims. Take, for example, the dramatic and fire-filled show “Cryptosoft” at the SSE Arena in London where, in typical OneCoin fashion, Ignatova dubbed OneCoin the “Bitcoin Killer” and anyone who spoke out against it a “hater.