OneCoin, the other $4 Billion Crypto Ponzi, Sued by Ex-Client on Grounds of Fraud and Misrepresentation

  • The allegations levied against OneCoin Ltd include four counts of securities fraud, contract breaches, fraudulent inducement, and misrepresentation.
  • The Plaintiff’s total losses to date amount to a sum of $130,000 approx.

    As per an all-new class action complaint filed against Onecoin Ltd recently, the crypto firm is facing allegations that it has been indulging in a number of nefarious activities such as:

  • Securities fraud
  • Breach of contract
  • Unjust enrichment
  • Fraudulent inducement
  • Fraudulent misrepresentation
  • Negligent misrepresentation
  • Conversion and civil conspiracy.

A quick glance at the aforementioned allegations clearly shows us that the common theme underlying all of these misgivings is ‘fraud’. In addition to this, it has also been reported that OneCoin’s operations have resulted in financial harm amounting to a whopping sum of USD $4 Billion.

A Closer Look At The Case At Hand

As per some of the court documents available online, the plaintiff ‘Christine Grablis’ — who at one time was allegedly a member of the OneCoin network — claims that she paid the crypto firm a total of $15,800 to become a part of OneCoin’s now-defunct MLM scheme. However, as of the today, Grablis’ total incurred losses with the company lay around the $130,000 range.

Also, at this point in the article, we should point out that OneCoin made its way into the crypto scene back in 2014 when the firm’s first office was established in Sophia, Bulgaria. Subsequently, the firm set up shop in a number of other global destinations such as Dubai and Belize in rapid succession — primarily because the company's native token offering ‘OneCoin’ started to gain a lot of traction due to its multi-level marketing framework.

How did Scheme Work?

According to the plaintiff, interested investors were given various trader packages to choose from — for which they were remunerated as well. The pyramid scheme basically used the membership fees of new clients to pay off older customers much like any other Ponzi Scam. However, the really weird part about all this was that investors were not able to detect any suspicious activities on OneCoin’s behalf even though most of the so-called “educational material” being provided by the firm to its clients was directly lifted from sources such as Wikipedia.

On the financial side of things, many experts have commented that the actual scale of this case is quite hard to visualize since Onecoin was able to generate over $4 Billion in revenue between the “fourth quarter of 2014 and the third quarter of 2016”. If that wasn't enough, it should also be pointed out that during Q4 2016, the firm boasted of a user base that exceeded nearly 2.7 million individuals.

Other Details Worth Pointing Out

  • As per the filing, four individuals, in particular, have been charged with fraud. At press time, two of these defendants have been brought into custody by US law enforcement agencies, while the whereabouts of the other two miscreants are still unknown.
  • Mark Scott — one of the individuals who was arrested by the police in relation to this case — was previously a partner at Locke Lorde (a reputable law firm that has offices all over the world).
  • During September of last year, Scott was indicted for trying to launder over $400 million through the use of various shady investment tools.

Final Take

In closing out this piece, we can see that the outcome of this case will be quite interesting since many experts believe that this is one of the most expensive crypto related lawsuits to have ever come out from within the digital currency domain.

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