China arraigns 98 affiliates from OneCoin regarding a $2 billion scam

Prosecutors in China recently charged four more suspects allegedly involved in the $2 billion cryptocurrency internet scam that took place at OneCoin. About $267.5 billion were recovered during the investigation that has been ongoing since July 2016 by the Ministry of Public Security. About 98 people so far been prosecuted for misleading millions of investors across 20 provinces in the country.

OneCoin is a cryptocurrency exchange founded by Ruja Ignatova.  Some of the individuals charged have since been sentenced to up to four years in prison and/or fines ranging from $1,565 – $783,000).

Last year the Chinese government banned initial Coin Offerings (ICOs) on the grounds that they are illegal and unauthorized ways of raising funds. At the same time the regulators also closed all the domestic cryptocurrency exchanges.

ICOs are one of the most popular sources of fundraising for startups. The funds are raised through the existing cryptocurrencies such as Bitcoin (BTC), and Ethereum (ETH).  OneCoin marketed itself as the ‘first transparent, global Cryptocurrency for everyone’. However, OneCoin turned out to be the largest get-rich-quick scheme scam involving a large number of people spread across the globe.

Since the launch of the digital currencies many people have lost their savings in ICOs that turn out to be scams. The cryptocurrency space is not regulated by anyone, and most people involved in the business are  virtual.  Several governments across the world have warned their citizens from engaging themselves in crypto assets ventures.

Additionally commercial banks and other financial institutions have shunned from doing business in the cryptocurrency niche. However the industry continues to flourish despite the challenges facing the industry.