Business

Steve Kaaru

Multi-billion dollar Ponzi scheme OneCoin sued by aggrieved investor

A former investor in the infamous OneCoin cryptocurrency project has sued the firm over the loss of $130,000. Christine Grablis accuses the firm of a breach of contract, fraudulent misrepresentation, civil conspiracy and a host of other charges. Grablis is also seeking a class action lawsuit to represent other aggrieved investors.

Grablis is represented by Silver Miller, a law firm which specializes in crypto-related cases. She claims to have invested an initial $16,000 in OneCoin in August 2015. In the year that followed, she invested a further $103,000, with the lawsuit estimating her total losses to the fraudulent project to be $130,000.

The lawsuit names Ruja Ignatova, Konstantin Ignatov, Sebastian Greenwood and Mark Scott as the defendants. Ruja, referred to in the OneCoin circle as the Crypto Queen, is one of the co-founders of the project. According to a report by Bloomberg, Ruja has been charged with securities fraud and money laundering in the state of New York. She is yet to be arrested for the charges, having allegedly kept a low profile to duck the authorities.

Kostantin, Ruja’s younger brother and also one of the defendants, was also charged with wire fraud in connection with the OneCoin scheme, the report further alleges. He is alleged to have been one of the high ranking executives at OneCoin Limited. The lawsuit revealed that he was arrested at the Los Angeles International Airport in March this year and transferred to a federal prison in New York where he is believed to be held currently.

While most defendants were founders or high-ranking officials at OneCoin, the lawsuit also named lawyer Mark Scott as a defendant. Scott was a partner at Locke Lord, an international law firm. The lawsuit alleges that “using his law license and legal knowledge, SCOTT formed foreign hedge funds through which he and his fellow Defendants laundered the proceeds of the OneCoin cryptocurrency scheme.” The total amount he helped launder is alleged to be over $400 million using bank accounts in the Cayman Islands and the Republic of Ireland.

This is not the first time that OneCoin has had run-ins with authorities. The firm, which is now regarded as one of the biggest Ponzi schemes in the crypto industry is believed to have amassed more than $4 billion from unsuspecting investors. It claimed to offer a multi-level marketing system in which members earned commissions for recruiting others to purchase OneCoin tokens.

As we reported last year, Chinese authorities charged 98 people who it believed were involved in the scam. The authorities had scrutinized over 20,000 bank accounts and millions of transactions as they sought to bring down one of the most extensive crypto scam in the world.

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