A former attorney from Locke Lord LLP pled not guilty on a new indictment that further charged him with bank fraud and laundering $400 million related to a widely known cryptocurrency scam, OneCoin.
OneCoin Trial Continues
Mark S. Scott appeared at a conference before U.S. District Judge Edgardo Ramos in Manhattan, ahead of the trial for laundering some of the funds of crypto pyramid OneCoin.
Prosecutors say Scott was responsible for laundering $400 million of the proceeds, which based on the most conservative estimates exceed $3.3 billion. The share of Scott was relatively small, as the total international haul of the scheme may reach as high as $17 billion, based on the estimates of the recent BBC investigation.
The laundering was done through a series of equity funds based in the British Virgin Islands, with banking through the Cayman Islands.
Scott reportedly managed to transfer around $300 million of the funds to the Bank of Ireland, while concealing the source of the money. Witnesses from the Bank of Ireland may testify via two-way closed-circuit television. At this point, Judge Ramos is yet to approve the closed-circuit testimony.
‘Crypto Queen’ Still Missing
Ruja Ignatova was the highly prominent Cryptoqueen at the helm of OneCoin. The scheme featured offices in the center of Bulgaria’s capital, Sofia, and OneCoin even enjoyed the government’s approval. Ignatova has not been seen since 2017. Her brother, Konstantin Ignatov, was seen selling schemes similar to OneCoin, before he was arrested in Los Angeles in March.
Prosecutors have indicted Ruja Ignatova, also known as Cryptoqueen, who co-founded OneCoin in 2014 to market the OneCoin cryptocurrency, according to court documents. She led the company until her disappearance in late 2017, at which point her brother Konstantin Ignatov, another defendant, allegedly began to take control.
OneCoin never had an open-market price, or even a public blockchain. Buyers were given coins generated in an unknown way, and some were even given faked assets. According to the prosecution, Ignatova wrote an email upon her exit scam, reportedly saying, “Take the money and run and blame someone else for this.”
OneCoin dwarved other pyramid schemes, and managed to exist outside the scrutiny of the more knowledgeable crypto community. Instead, it relied on meetings and in-person persuasion. Earlier allegations connected Ignatova with the BitConnect pyramid, which ended up taking only $2.6 billion. A more recent Ponzi scheme, Plus Token, reportedly took away $2.9 billion in Bitcoin (BTC), with some of the funds liquidated through the Huobi exchange.
Pyramid schemes require a constant inflow of new funding and new participants and have enjoyed the crypto space as a source of enthusiastic buyers.
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