The head of the OneCoin platform, Konstantin Ignatov, has been arrested in the United States for fraud charges related to a cryptocurrency. The virtual currency OneCoin users have been bounced billions of dollars, said the federal prosecutor yesterday in New York. The Bulgarian was arrested and detained at Los Angeles airport on Wednesday.
OneCoin was created in 2014 in Bulgaria with the aim of embezzling parts of the money paid by users, according to the investigation files. Once the money was exchanged, it was virtually impossible to get it back. Users who were soliciting others received credits, which helped the company grow rapidly. Investors from China, the US and Europe were so cheated.
Unlike typical cryptocurrencies
OneCoin worked differently than typical cryptocurrencies like Bitcoin. Instead of relying on a decentralized blockchain system, the digital finances were controlled by a central office. The company made between the end of 2014 and autumn 2016, according to the investigators 2.2 billion euros „profit“. Investigators were able to locate around € 1.07 billion, and a large part had been laundered in financial institutions in 21 different countries.
Ignatov had taken over the OneCoin business in 2018 after his sister and co-founder Ruga Ignatova disappeared. It is still considered fleeting. In addition, a US lawyer has been arrested, who is said to have washed OneCoin revenue worth around 356 million euros. Dozens of other middlemen were arrested in China in 2017.
