OneCoin's head of legal and compliance gets four years in jail as CZ sentencing comes next

The head of legal and compliance for crypto pyramid scheme OneCoin was sentenced on Wednesday to four years in prison by US District Judge Edgardo Ramos, according to a press release by the US Department of Justice. With the bull season making waves in the crypto community, many have expressed concerns of similar scams that may abound in the space.

Also read: Kucoin Exchange, execs charged by DoJ, HSI, authority cites ‘multibillion-dollar criminal conspiracy’

History of the OneCoin scam

Ruja Ignatova, dubbed “Cryptoqueen” established OneCoin in 2014 in Bulgaria, touting it to be the next big thing that would surpass Bitcoin and other cryptocurrencies at the time. Ruja traveled across several countries, convincing investors to invest their money by promising hefty returns. However, authorities later discovered in 2017 that the whole project was a scam, and its touted cryptocurrency was non-existent. 

Ruja disappeared after the discovery, and she was last seen in a flight to Greece. During its operation, OneCoin and its executives defrauded about $4 billion from investors between Q4 2014 and Q4 2016, making it one of the largest cryptocurrency scams ever. 

Several of OneCoin's executives were charged to court after the incidents. Ruja's brother, Konstantin Ignatova, received a 90-year prison sentence after pleading guilty to money laundering and fraud. Earlier this year, OneCoin's lawyer Mark Scott, who laundered $400 million for the scam project, received a sentence of 10 years in prison.

Read more: SBF sentenced to 25 years in prison after November conviction

Irina Dilkinska sentenced to four years in prison

Irina Dilkinska is the latest addition to OneCoin executives who have been sentenced. The press release announcing the sentence of Irina was made public by Damian Williams, the United States Attorney for the Southern District. She was sentenced to four years for her role in the scheme by US District Judge Edgardo Ramos.

Dilkinska, who was head of legal and compliance for OneCoin, "assisted in running its day-to-day operations and laundered money for OneCoin," said the announcement. This included "arranging for the transfer of $110 million in fraudulently obtained OneCoin proceeds to a Cayman Islands entity," it further stated.

This follows the sentencing of Sam Bankman-Fried to 25 years in prison on March 28 for spearheading several scams that saw customers of the bankrupt exchange losing up to $8 billion.

Also read: Kucoin's BTC, ETH, and USDT reserves dip after charges from US DoJ and CFTC

In the same vein, former Binance CEO Changpeng Zhao, also known as "CZ”, will face sentencing on April 30 after pleading guilty to charges of not maintaining effective anti-money laundering (AML) procedures in Binance.US. As the date approaches, traders are keeping an eye on Binance Coin (BNB) and how it could react to the sentence.  A filing in the case revealed that CZ could face up to 10 years in prison.

Consequently, crypto exchange Kucoin and its founders have also been charged by the US Department of Justice and the Commodity and Futures Trading Commission for failure to adhere to robust AML policies and breaching the Bank Secrecy Act.