Advancing digitalisation has undoubtedly contributed to the growing fascination around Bitcoin, cryptocurrencies and blockchain technology. Nevertheless, it is important to note here that trading with digital currencies and the use of blockchain technology entail a number of risks and legal issues as well as problems, as the current legal cases concerning the alleged cryptocurrency OneCoin make clear.

At Schlun & Elseven Rechtsanwälte, our lawyers are available to advise fraud victims regarding their legal rights in Germany. Make sure to contact our team directly to receive comprehensive legal advice.

Rechtsberatung im Ausländerrecht

Schlun & Elseven Rechtsanwälte advise and represent private individuals and companies in all matters of German law. Our lawyers will outline your rights and legal options in matters of alleged cryptocurrency fraud. We are available by telephone and email and we provide video conferencing options for our clients. If you require specialised legal counsel from experts, do not hesitate to contact our team to arrange a personal meeting.

An Introduction to OneCoin

In 2008, Satoshi Nakamoto published his Bitcoin whitepaper, which has been called the founding document of digital currencies. It contained the foundation for cryptocurrencies and blockchain technology by describing the combination of various encrypted concepts to create a decentralised system, paving the way for digital currency.

In terms of market capitalisation, Bitcoin (BTC) has accounted for the largest share for years, placing it at the top of all cryptocurrencies. Some competitors wanted – and continue to try – to change this. This desire to become more prevalent than Bitcoin is also the case with the supposed cryptocurrency OneCoin, which its founder promoted as the most important digital currency of the future.

In September 2014, Dr. Ruja Ignatova and Sebastian Greenwood founded the cryptocurrency OneCoin and the company OneCoin Ltd. to surpass the most prominent digital currency to date, Bitcoin, and thus become the most successful cryptocurrency worldwide. The venture developed quickly and seemed successful. Interest in OneCoin grew, as did the number of investors. Ruja Ignatova promoted the company as a brand ambassador. Events were held around the world to attract more and more new investors. They advertised the possibility of purchasing learning programmes and tokens to make it easier for customers to familiarise themselves with the concept of this new digital currency.

In the end, it turned out that compared to other digital currencies, OneCoin likely lacked the use of blockchain technology. Between 2014 and 2017, around 4 billion US Dollars are said to have been invested using a kind of pyramid scheme. This method is not legal in Germany.

Warnings about OneCoin

In the meantime, many people are asking themselves how such a scam could have happened. Were there no warnings or indications that it could be some kind of pyramid scheme?

To be distinguished from the illegal pyramid scheme is the legal multi-level marketing. However, it isn’t easy to clearly differentiate between these two models. In comparison to other successful and well-known cryptocurrencies, however, it can be stated that they have a “white paper” in which, among other things, the technical basics are explained. OneCoin, on the other hand, is said to have neither such a white paper nor a secure blockchain.

In addition, the Swedish and Norwegian authorities, among others, warned against OneCoin as early as 2015. Similar reactions accumulated in the following years. In Italy, for example, all activities related to the alleged currency were even banned by the competent authority in 2016. Likewise, in Germany: the Federal Financial Supervisory Authority (BaFin) also became aware of the company “IMS International Marketing Services GmbH” in 2016 and ordered the cessation of business activities. In 2017, investigations began worldwide against OneCoin for investment fraud.

Investigation for Capital Investment Fraud

The founder of the OneCoin company, Ruja Ignatova, has been missing since the end of 2017. So has most of the money invested in the company by an estimated 3.5 million people.

Other people involved in the scandal are now facing trial. For example, the founder’s brother, who took over the management of the company after she disappeared. He confessed to his involvement in the fraud and money laundering. Thanks to Konstantin Ignatova’s confession, the investigation of the case can now move forward.

Criminal Proceedings in Germany

In Germany, the public prosecutor’s office in Bielefeld is also investigating business partners of OneCoin, such as the company “IMS International Marketing Services GmbH”. In the meantime, three defendants are standing trial. In September 2021, the hearings began at the Münster Regional Court. The defendants are a married couple from Greven, accused of carrying out payment services without the required licence, and a lawyer from Munich, accused of having committed money laundering.

Specifically, the couple is accused of taking approximately 320 million euros from German investors and transferring a large part of this money to foreign accounts. The couple had received a commission for this transaction. By offering payment services without the appropriate authorisation, the couple had made themselves liable to prosecution. It has been pointed out that if the couple from Greven knew about the alleged OneCoin fraud, they might also have made themselves liable to prosecution for aiding and abetting it and money laundering. Criminal proceedings have already been opened. A judgement is expected in May 2022 at the earliest.

The competent courts have already seized funds to secure assets so that injured parties can reclaim the assets they invested. However, the proceedings may be protracted due to the number of people affected. We advise you to contact a lawyer as soon as possible to enforce your claim as quickly as possible. You are welcome to contact the lawyers of Schlun & Elseven Rechtsanwälte, as we have the necessary expertise to examine your legal matter expertly.

Cybercrime and the Risks of Trading in Cryptocurrencies

Trading in cryptocurrencies is becoming increasingly popular. Nevertheless, it harbours several risks and dangers. Fraudsters and hackers are becoming increasingly active. Cybercrime offences are increasing considerably. In addition to fraud and money laundering cases – such as with OneCoin – identity fraud and cases of infection with computer viruses are growing.

If you suspect that you have been the victim of a cryptocurrency-related crime, don’t hesitate to contact the lawyers at Schlun & Elseven Rechtsanwälte. Our criminal law practice group will advise you, represent you in and out of court and advocate for your interests and rights.

Legal Options for Victims – Support with Schlun & Elseven

If you have lost money in connection with the alleged cryptocurrency OneCoin, we advise you to contact our legal team. Our experts will advise you in detail and develop a strategy for defending and representing your interests and rights together with you. We will illustrate the legal steps necessary to recover your money and support you.

Our law firm is also your reliable and competent partner for all questions regarding cryptocurrency and blockchain technology and the legal situation surrounding the OneCoin Scam. As a full-service law firm, we can advise you on all related matters.

Schlun & Elseven Rechtsanwälte is a multidisciplinary and full-service law firm. With offices in Cologne, Aachen and Düsseldorf, as well as conference rooms in Hamburg, Berlin, Stuttgart, Frankfurt and Munich, we operate nationwide and are always at your service. Our lawyers advise you in German, English and other languages. Call us, send us an email or use our online form – we will be happy to give you an overview of your legal options as part of an initial assessment.