Cryptocurrency platform One Coin has been taken to court for perpetrating an investment scam. The platform was said to have run a pyramid scheme and in the process stole billions of dollars in cryptocurrency revenue from investors.
Reports have it that some investors were members of Christian churches based in Samoa and Auckland, located in the South Pacific.
New evidence regarding the case also shows that the leaders of the One coin Ponzi scheme did not regard any of their victims, all they were after was getting money from them.
The investigation revealed that two churches were involved in the scam from the onset. The churches are Samoa Worship Center Christian Church and the Auckland branch of the Samoan Independent Seventh Day Adventist Church (SISDAC).
Members of both churches were promised massive receive returns on their investment after the scam was publicised by the leaders of both churches.
The leaders convinced almost all their members to invest in the scheme as they would be granted special status due to their membership of the church. They were promised wealth and great returns which made most of their members invest almost all their income in the Ponzi scheme. A decision to came to regret greatly.
Auckland-based lawyer Campbell Pentney explains:
“In these communities, there is an enhanced sense of family and community bonds, and with that comes a very strong sense of trust. Of course, trust can be exploited by these scams.”
Ed Moy, who directed the U.S. Mint between 2006 and 2011, explains:
“If it seems too good to be true, it’s too good to be true. Cryptocurrency, in many ways, is just a much more efficient mechanism [for making transactions], but a scam is still a scam… The pitch of the scam was, ‘We developed this coin; it’s going to be worth a ton of money. Please invest.’ Cryptocurrencies themselves, in general, are not a bad thing, but if you’re creating it out of thin air and there’s nothing to it, and it’s the front for a scam, it just makes it a much more efficient scam, and because the volume of dollars is so much greater for electronic and digital transactions, crooks go where the money is.”
The creators of One coin, Ruja Ignatova and Sebastian Greenwood have also been convicted for their crimes. According to reports, the alt-coin made a massive $4 billion in less than two years, making it the biggest gainer in the crypto space.
The coin was created in 2014 and prosecutors say since its creation, it has always been used to scam people. The leaders in the scheme used a specific method to dupe people by encouraging investment with no way to transfer, sell or convert their crypto to fiat. The coin does not even have a public ledger with which their investment can be monitored like other alt-coins.
Manhattan U.S. attorney Geoffrey Berman explains:
“These defendants created a multibillion-dollar cryptocurrency company based completely on lies and deceit. They promised big returns and minimal risk, but, as alleged, this business was a pyramid scheme based on smoke and mirrors more than zeroes and ones.”