Brought in mid-2019 by investors who lost hundreds of thousands of dollars to the scheme, the complaint accuses the heads of OneCoin, including «Crypto Queen» Ruja Ignatova and Konstantin Ignatov, of promoting fraudulent cryptocurrency investments and violating federal securities laws.
OneCoin – the cryptocurrency investment scheme accused by the U.S. of being a Ponzi-type scam – may escape from a class-action lawsuit due to procedural mishaps by the lead plaintiffs.
However, the federal judge presiding in the case in the Southern District of New York court said the lead plaintiffs, Christine Grablis and Donald Berdeaux, have not been filing the agreed monthly updates on their efforts to serve court papers to all the listed defendants.
District Judge Valerie Caproni warned in an opinion and order filed on Friday that Grablis and Berdeaux «must show cause no later than April 16, 2020, why this case should not be dismissed with prejudice for failure to prosecute under Fed. R. Civ. P. 41(b).»
Caproni also «sternly warned» the lead plaintiffs could see sanctions if they fail to comply with court orders going forward.
Last March, U.S. prosecutors in New York officially charged OneCoin’s Ignatova and Ignatov, saying the project stole “billions” from investors through its alleged cryptocurrency pyramid scheme.
The U.S. Attorney for the Southern District of New York indicted the pair on charges of wire fraud, securities fraud and money laundering at the time. However, while Ignatov was arrested at Los Angeles International Airport the same week, the scheme’s founder, Ignatova, is still at large.
OneCoin Founder’s Brother Faces 90-Year Jail Term After Plea Deal
The Department of Justice (DOJ) reached a plea deal with Konstantin Ignatov for his involvement in OneCoin Ltd., a cryptocurrency project based out of Bulgaria.
Ignatov pleaded guilty to multiple counts including money laundering, according to the BBC. The deal was reached Oct. 4, but released publicly Tuesday following his arrest at Los Angles International Airport in March 2019.
He is the brother of OneCoin co-founder Dr Ruja Ignatov, colloquially called “Cryptoqueen” for her actions in the alleged scam and subsequent disappearance.
Under the terms of the plea, Ignatov will not face further charges as they emerge against OneCoin and its constituents, with the exception of possible tax violations. Still, Ignatov faces up 90 years in prison, the BBC said.
OneCoin raised some $4 billion for its cryptocurrency and proprietary ecosystem in funding, in what multiple governments have called a Ponzi scheme. OneCoin denies those allegations and continues to operate.
The BBC said Ignatov could be moved into the U.S. witness protection program depending on the longevity of his sentence. Court documents say individuals have come forward with threats against him.
While testifying in another ongoing case against Mark Scott, a U.S. lawyer accused of laundering funds $400 million from OneCoin, Ignatov revealed more details about his sister, the BBC said. A warrant for her arrest from the DOJ is currently outstanding.
The BBC said Ignatov told the court that his sister acquired a passport and tickets to Vienna and Athens from her home in Bulgaria. She called OneCoin critics “haters” and was wary of being given up to authorities, he said. Although Ignatov hired a private investigator to find her, he has not spoken to her since her disappearance, according to the BBC.
