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Anatomy of a cryptocurrency pyramid scheme

Jaclyn Jaeger | April 1, 2019

Much has been discussed about the business risks posed by cryptocurrency. Now, risk and compliance professionals have a real-life cryptocurrency pyramid scheme with which to cite.

Konstantin Ignatov was arrested March 6 at Los Angeles International Airport on a wire fraud conspiracy charge stemming from his role as the ringleader of an international pyramid scheme that involved the marketing of a fraudulent cryptocurrency called “OneCoin.”  Additionally, the Department of Justice on March 7 unsealed an indictment charging Ignatov’s sister, Ruja Ignatov—co-founder and original leader of OneCoin—with wire fraud, securities fraud, and money laundering offenses. 

Due to the misrepresentations that Konstantin Ignatov,...

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