A filing in a lawsuit filed against cryptocurrency firm OneCoin has revealed that one of the proposed lead plaintiffs lost over $700,000 in the scam.
According to documents submitted on July 8th in a Manhattan court, proposed lead plaintiff Donald Berdeaux invested approximately $755,918.92 in OneCoin between August 2015 and May 2016. This translated to an investment of around $76,000 per month over the ten-month period.
In 2015, between August and November, Berdeaux invested $252,096.32 in the OneCoin cryptocurrency scam. The following year Berdeaux topped up his investment with an additional $504,822.60.
Another investor lost over $100K
Berdeaux’s proposed co-lead plaintiff Christine Grablis also lost sums amounting to over $100,000 by investing in OneCoin. Per documents filed in the lawsuit, Grablis invested $64,813 between August and November 2015. In 2016, she invested $38,765 between January and August bringing her total investment to $103,578.
Grablis initiated the lawsuit two months ago. Alongside Berdeaux, Grablis has indicated that ‘to the best of their knowledge, that there are no other applicants with a bigger financial interest who are seeking to be the lead plaintiffs.
Besides the Sofia, Bulgaria-based OneCoin Ltd, other defendants in the suit include the head of OneCoin Konstantin Ignatov who was arrested earlier this year by U.S. authorities.
The leaders of an alleged multibillion-dollar international pyramid scheme that involved the marketing of the cryptocurrency OneCoin were charged by U.S. prosecutors with fraud and money laundering. The alleged head of the scheme, Konstantin Ignatov, was arrested Wednesday at LAX pic.twitter.com/QRvqp9KAjv
— Diligence IG (@DiligenceIG) March 14, 2019
OneCoin scam – a family affair
Ignatov’s sister Ruja Ignatova who is believed to have founded OneCoin is also a defendant alongside other officials who actively promoted the scam. Ignatova has, however, been on the run since October 2017 according to a complaint that was unsealed after Ignatov’s arrest.
Last month, Ignatov pleaded not guilty to charges of wire fraud. The OneCoin executive was also denied release on bail and will consequently have to face trial while in custody. Despite putting up a $20 million personal recognizance bond, Ignatov was denied freedom while undergoing trial over fears that he was a flight risk.
How the OneCoin scam went viral
According to the prosecutors, the OneCoin cryptocurrency scam generated revenues of approximately $3.8 billion from its inception in the 4th quarter of 2014 and the 3rd quarter of 2016.
Part of the reason for the scam’s rapid growth was that it employed a multilevel marketing structure. In this structure, members were tasked with selling to recruits educational materials for trading. The recruits would receive educational materials, which was mostly content duplicated from online encyclopedia Wikipedia, and tokens which were supposed to be submitted to allow for the mining of OneCoins.
Recruiters would get a commission ranging between 10 percent and 25 percent of the value of the educational products. The cryptocurrency scam is still ongoing and one of its websites shows that the prices of the educational products range in price between €110 ($123) and €55,555 ($62,300).