OneCoin founder Konstantin
Ignatov was arrested at the Los Angeles airport on March 6 on allegations of wire
fraud and cryptocurrency scams, the Manhattan US attorney’s office announced.
An US investigation concluded that OneCoin is in fact a “multibillion-dollar
pyramid scheme involving the sale of a fraudulent cryptocurrency.”

Established in 2014 in Bulgaria,
the OneCoin operation allegedly involved selling cryptocurrency that didn’t exist,
and tampering with prices. It was run by Ignatov, his sister Ruja Ignatova
who’s currently in hiding, and a number of others. A third suspect in the
OneCoin operation is Mark Scott, charged with laundering
half a billion dollars
.

The three allegedly took
advantage of the cryptocurrency craze to make money off gullible investors by
selling coins with zero value. Investors couldn’t track their money or use it
to make purchases, said FBI Assistant Director-in-Charge William Sweeney,
Jr. 

“This is an old scam with a
virtual twist,” said IRS Special Agent in Charge John R. Tafur. “As
alleged in court documents, the cryptocurrency OneCoin was established for the
sole purpose of defrauding investors. Ignatov and Ignatova allegedly convinced
victims to invest in OneCoin based on complete lies about the virtual
currency.”

Despite charges and Ignatov’s
arrest, OneCoin is still active and making money off investment funds wired
from people around the world to buy OneCoin packages. According to US law
enforcement, bank records show that “OneCoin Ltd. generated €3.353 billion in
sales revenue and earned ‘profits’ of €2.232 billion” between 2014 and 2016.

They each face at least 20 years
in prison for their actions.