The operators of OneCoin, Konstantin Ignatov and Ruja Ignatova, are at the heart of a new lawsuit which alleges the brother and sister duo ran a multimillion-dollar Ponzi scheme designed to dupe cryptocurrency investors.
The lawsuit (.PDF), filed this week by law agency Silver Miller on behalf of investor Christine Grablis with the US Southern District Court of New York, aims to push a class-action case forward against OneCoin.
“[They] created a multi-billion-dollar “cryptocurrency” company based completely on lies and deceit,” the lawsuit claims. “They promised big returns and minimal risk, but this business was a pyramid scheme based on smoke and mirrors more than zeroes and ones. Investors were victimized while the defendants got rich.”
According to the complaint, Bulgaria-based OneCoin and the organization’s subsequent “never-ending” Initial Coin Offering (ICO) “purported cryptocurrency that never really existed, on a blockchain that never really existed, born from mining farms that never really existed, yet fraudulently sold to investors throughout the world through a densely-packed multi-level-marketing system.”
In other words, investors were allegedly defrauded out of their cash due to OneCoin’s Ponzi scheme. An estimated $4 billion in revenue is believed to have been generated.
Grablis alleges that Konstantin and Ruja unjustly enriched themselves by duping cryptocurrency traders into purchasing participation packages and memberships, of which these funds would be used to pay off existing investors. In turn, investors would be driven to sign others up, which kept the alleged Ponzi scheme running.