In today's edition of YIYL, we take a little walk down memory lane. If you weren't around before 2016 you probably didn't see the obvious scams like Bitconnect and OneCoin, if you did you wouldn't have fallen for rebranded ponzis like Luna and FTT token, so let that be a lesson to you.
OneCoin was an MLM Ponzi that leveraged a network of affiliates, you would buy packages and get coins, and then to secure an income you'd get other people to buy packages. The Ponzi reached about 3 million users before it went tits up, which is rather large considering the number of people in crapto at the time.
To put it into perspective, FTX didn't even have 3 million active users on its platform, it was in the high hundreds of thousands, yes they had millions of accounts but active users is a different story.
How OneCoin worked
OneCoin would sell these "educational" packages and along with it you'd get an allocation of onecoin or be told your course would purchase you a set of OneCoin tokens. As you sold more packages to others you would profit from the people you sign up under you.
People did it because they were told that their OneCoin would always go up in price even though there wasn't even a freely traded liquid market for this shitcoin.
Eventually, when it came time to payout, the co-founders turned tail and ran for the hills never to be seen again and all we were left with were stories of people who were left destitute all over the world.
Gunning for the top guns
Now a near 5 years on One of the founders behind OneCoin pleaded guilty to federal U.S. charges on Friday after one of the largest financial scams of all time, as the US continues to clean up the space. I think a lot of scammers who got away with shit like this back in 2014-18 think they're in the clear, but it looks like this is only the start of the cryptoclean up.
Greenwood, a citizen of Sweden and the U.K., had been arrested at his home in Thailand in 2018 and extradited to the U.S.
“Karl Sebastian Greenwood operated one of the largest international fraud schemes ever perpetrated,” said Damian Williams, U.S. Attorney for the Southern District of New York. “Greenwood and his co-conspirators, including fugitive Ruja Ignatova, conned unsuspecting victims out of billions of dollars, claiming that OneCoin would be the ‘Bitcoin killer.’”
Karl might be a stepping stone in the case as the big win is still the so-called Dr. Ruja the Ph.D. shilling phase of the project.
Ignatova, known as the “CryptoQueen,” remains on the Federal Bureau of Investigation’s (FBI) Most Wanted list as another founder of OneCoin, which was based in Bulgaria.
The FBI is offering a $100,000 reward for information leading to her arrest so if you do have info on her, you could secure at least 5 bitcoin for your troubles at current prices.
The wheels of justice move slow
This has been the first big news since Konstantin Ignatov, co-founder pleaded guilty and signed a plea and faces up to 90 years in prison.
After being arrested at Los Angeles International Airport in March 2019, Ignatov pleaded guilty to several charges, including money laundering and fraud. Konstantin is also the brother of Ruja.
A $15 billion dollar scam
If you weren't around during the days of OneCoin, then here is a high-level summary of the story but the short story is a confidence game and Ponzi and basically a prelude to Do Kwon.
Sources:
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