One of the co-founders of the alleged cryptocurrency Onecoin appears to have been in custody in the United States for a long time. The brother of the “crypto-queen” continues to cooperate with the US authorities and says: There was never a blockchain.
Onecoin money launderer Mark Scott wanted to treat himself again. In early March, he was observed eating out with his bodyguards in Florida. “Living the high life,” wrote the investigative portal Inner City Press. But freedom didn’t last long. The lawyer was first ordered to prison, and now he’s back in house arrest because of the corona pandemic. The verdict is scheduled for July 14. Scott is likely to be the first member of the Onecoin team to be sentenced to a longer prison term.
Others will soon follow: Konstantin Ignatov, who later became head of Onecoin and brother of the “crypto queen”, is cooperating with the US authorities. Gradually he testifies against the Onecoin employees. Now it became known that the co-founder of the alleged cryptocurrency, Sebastian Greenwood, has probably been in custody in the United States for two years. In Germany, the public prosecutor’s office in Bielefeld is dedicated to the backers of a Greven company that has been receiving payments from Onecoin investors from Germany and abroad for months.
Between early 2015 and October 2016, Onecoin investors had put over 3.3 billion euros in the alleged cryptocurrency, and probably more billions after that. The promise: Onecoin should become the next Bitcoin and bring the quick money to its investors. The value of the currency is said to have risen rapidly: from 50 cents in January 2015 to 29.95 euros four years later. But in reality the currency is worthless. The founder Ruja Ingatova disappeared in 2017. It is probably the biggest cryptoscandal ever.
It is investigated against nine people
In Germany, the public prosecutor’s office in Bielefeld is investigating Onecoin. According to the spokesman for the public prosecutor’s office Gerald Rübsam, the investigation is mainly aimed at those involved in the area of International Marketing Services GmbH (IMS). Between 2015 and 2016, IMS accepted payments from onecoin investors and forwarded them to accounts around the world. The prosecutor’s allegations against the suspects: fraud, money laundering, progressive customer acquisition and the illegal provision of financial and payment services. Meanwhile, the prosecutor’s office is investigating nine people. In February there were still eight.
“We have examined about half of the deposits so far,” says prosecutor Rübsam. It had become clear that the majority of the deposits of over 300 million euros did not come directly from the Onecoin investors. Most of the payments were probably transferred from Onecoin to the IMS accounts for concealment and then passed on to other accounts.
The procedure of the IMS became known for the first time in December 2015. At the time, a savings bank with which IMS had an account had filed a complaint about suspected money laundering. Within three days, the savings bank account of IMS received 705 bookings with a total value of around 2.5 million euros in connection with Onecoin. The Sparkasse considered the business model of the alleged cryptocurrency to be impenetrable, the high transfers seemed suspicious to the employees. Over time, more banks filed suspicions of money laundering, because IMS GmbH had repeatedly opened new accounts with changing banks for the income from the Onecoin sales.
Rübsam has not yet been able to conclude the procedure. The reason: It is difficult to prove Onecoin fraud. The company had repeatedly claimed to market a real cryptocurrency with a functioning blockchain. However, everything points to the opposite. But it is difficult to prove that there was no blockchain, said Rübsam.
Authorities continue to search for “crypto-queen” Ruja Ignatova
In a process from the United States, new details are repeatedly revealed that prove that Onecoin is a fake currency. Last month, a nearly 2000-page transcript of the US case against attorney Mark Scott, who, according to the New York Southern District Prosecutor, was a money launderer for Onecoin, was released. Among the witnesses against Mark Scott is Konstantin Ignatov, the brother of the lost Onecoin founder Ruja Ignatova and later chair of the organization. Ignatov told the prosecutor that Onecoin had its blockchain checked and had some kind of seal of approval issued by an auditor, but the report was a fraud.
How far these statements can help in German proceedings against Onecoin is open. Some German law firms represent Onecoin victims in suing their investment from Onecoin distributors. Since Onecoin was sold directly to investors, investors can take action against the individual sellers. “But that’s mostly fruitless,” says lawyer Patrick Wilson from the Herfurtner law firm, which represents Onecoin investors in Germany. Even if you could prove to the sales agents that they had committed a criminal offense, they simply did not have enough capital to cover the damage suffered by the clients. The middlemen only receive a commission for the sale of Onecoin. Most of the money goes directly to Onecoin.
In the US, new details have been released about Onecoin co-founder Karl Sebastian Greenwood. The co-founder was shipped to the United States in 2018, according to the Bangkok Post. Since then, however, there have been no indications of his whereabouts. The New York prosecutor has now released a charge of charges against him in February 2018. Insiders now assume that he has been held in MCC New York prison under the name of Karl Greenwood for some time.
The US authorities could thus be closer to the missing “crypto queen” Ruja Ignatova than previously thought. Both Konstantin Ignatov and Sebastian Greenwood can hope for less punishment in return for their cooperation with the authorities. However, Konstantin Ignatov has previously testified that he has had no contact with his sister since she disappeared. Ignatov is due to be sentenced in July. Meanwhile, the cryptocurrency Onecoin continues to exist. The price is currently supposed to be 42.43 euros.