Why OneCoin’s Konstantin Ignatov travelled to the US
Was it ignorance, a false sense of security, stupidity, or a case of all three?
There has been a lot of speculation why Konstantin Ignatov, then CEO of OneCoin, travelled to the US in March 2019.
The ill fated trip culminated in Ignatov’s arrest at Los Angeles International Airport.
Today BehindMLM can reveal Ignatov confidentally travelled to the US, under the pretense OneCoin and the DealShaker expo he attended was legal.
Ignatov’s false sense of security was rooted in a legal opinion obtained by Denis R. Murdock.
Denis Murdock was one of OneCoin’s most prominent promoters in the US.
Today Murdock can be found shilling “Mobile Digital Body Scanner Analyzers” through his company Empower Global Group.
Getting back to the legal opinion; I’ve had to redact the issuing attorney as a condition of publication.
BehindMLM understands the attorney in question is part of the US’ ongoing OneCoin criminal investigation.
The first red flag in the legal opinion can be found in the quoted opening paragraph above.
The legal opinion was framed as an examination of the “legality of hosting (the) Expo”.
DealShaker was added to OneCoin as pseudo-compliance. The Ponzi scheme was taking off and they needed the appearance of a legitimate use-case.
And so DealShaker was launched, a barely functioning ecommerce platform that, at least partially, accepted onecoin tokens.
For the most part DealShaker was populated with cheap dropshipped goods from China.
Particularly gullible OneCoin investors were lured into buying luxury cars from Europe that never eventuated.
To create the illusion of legitimacy, OneCoin held DealShaker expos around the world.
In 2019, Denis Murdock was organizing one such expo on US soil.
The first clarification made in the legal opinion is that “The Expo as Anticipated is Legal Under U.S. Federal Law”.
This is based on the flawed premise that Ponzi schemes operated via cryptocurrency are legal.
The Expo as Anticipated is Legal Under U.S. Federal Law.
As Bitcoin and other cryptocurrencies become more and more mainstream, law enforcement agencies, tax authorities and legal regulators all over the world are trying to wrap their heads around the concept of cryptocurrency, and how exactly it ought to fit into existing regulations and legal frameworks.
According to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FINCEN), as of 2013, accepting Bitcoin or other cryptocurrencies as payment for well-natured goods and services is legal.
Bitcoin in particular has been classified in the U.S. as a convertible decentralized virtual currency, and FINCEN has affirmatively stated that those who obtain units of virtual currency for the sale of goods or services are not considered money transmitters, are not required to register and are operating within the bounds of federal law.
Bitcoin is now an accepted form of payment on several major and minor online marketplaces, as well as at many major national service providers, including Overstock, Shopify and OKCupid.
Moreover, there are shops and restaurants all over the U.S. where one can pay with Bitcoin.
In short, merchants accepting OneCoin at the proposed Expo will be operating legally under U.S. federal law and under established precedent set by Bitcoin and other cryptocurrencies.
This is a common strawman argument raised by proponents of MLM cryptocurrency Ponzi schemes.
When confronted with research identifying a company as a Ponzi scheme, strawman arguments raised include “cryptocurrency isn’t regulated”, “cryptocurrency isn’t a security”, or a near enough derivative.
These arguments, as the legal opinion aboe does, completely sidestep the pressing issue: Running a Ponzi scheme is illegal irrespective of the medium used.
A Ponzi scheme can be run through fiat, cryptocurrency, Disney Dollars – it doesn’t matter. It’s still an illegal Ponzi scheme.
What makes a Ponzi scheme so is the acceptance of investment (defined as an “investment contract” as per the Howey Test), and use of that investment to pay earlier investors.
With respect to an MLM Ponzi scheme, this eventuates by way of investment used to pay withdrawals by earlier investors.
This can be masked behind various ruses, e.g. DealShaker, a “trading bot” etc.
Alternatively you have your bare-bones Ponzi schemes that don’t bother. Or if they do it’s low effort terminology pseudo-compliance.
One example that comes to mind is “staking”, as a catch-all to avoid use of Ponzi terminology.
With that point made, the rest of Mudock’s legal opinion falls apart. It’s based on the false premise that OneCoin is somehow a legitimate $4 billion dollar Ponzi scheme.
The Expo as Anticipated is Legal Under Nevada State Law.
The vast majority of the Sates in the United States have not passed any specific laws regarding the usage of cryptocurrency.
However, some States have taken affirmative steps to embrace blockchain technology, while others have made moves to deter residents from engaging with cryptocurrency.
Nevada falls into the former category, and is generally viewed as a State very friendly to cryptocurrency.
In fact, on June 5, 2017, the Nevada State Legislature became the first US state to approve a bill which will block local government entities from taxing blockchain transactions.
Bitcoin is accepted regularly by merchants of all types across the State of Nevada, and there is nothing illegal about merchants accepting payment via OneCoin at the proposed Expo under Nevada Law.
In conclusion, it is my legal opinion that under both Federal U.S. Law and Nevada State Law, merchants can legally accept payments in OneCoin at the Expo.
Please don’t hesitate to contact me if you require any further elucidation on this matter.
OneCoin’s regulatory issue was never whether cryptocurrency was illegal, or whether merchants could legally accept OneCoin at the DealShaker expo event. It was, and always has been, OneCoin being a multi-billion dollar Ponzi scheme.
That’s what the entire US OneCoin criminal case is based on.
With OneCoin identified as a Ponzi scheme, any and all business operations attached to OneCoin are thus rooted in fraud.
Nonetheless, based on legal representations, Ignatov travelled to the US to attend Murdock’s Las Vegas DealShaker Expo.
Despite his arrest almost three years ago, Konstantin Ignatov’s criminal case is still playing out.
BehindMLM continues to track the status of all known US OneCoin related criminal actions.