She had a plan in case anything was discovered long before she got on a plane and disappeared, allegedly with only a handbag as luggage. The plan was, “Take the money and run and blame someone else.” This is how lawyer Ruja Ignatova, who grew up in the Black Forest, wrote to the man with whom she invented the cryptocurrency Onecoin – one of the largest alleged fraud schemes that ever existed. At least 5.2 billion have poured there since 2014. Ignatova has been called the “Kryptoqueen” by her followers. She promised them that Onecoin would replace Bitcoin and rocket endlessly. At least in one respect, Ignatova kept her word: in September 2017, she took the money, ran away – and now the Münster District Court must clarify the guilt that two men and a woman around her have incurred. . The trial opened on Friday.
A married couple from Greven who are not very young anymore and look like they accidentally got lost in the courtroom while walking through the park holding their hands with their backs to the clicking press cameras. In front of them is the wharf, where they are about to take their places. A Munich lawyer, also indicted, is already seated there, fashionable glasses, gray hair with a parting on the side, a short, cropped beard still dark, the corners of his lips lowered.
The paneled room on the ground floor of the tribunal de grande instance, surrounded by a lot of concrete, seems to swallow all the emotions. So here is the buzz that Onecoin has generated among millions of people around the world. Circa 2016 at Wembley Arena in London. Or in 2017 at Macau’s Studio City Event Center, whose ascending semicircular ranks got lost in the dark as lights and music exploded outside. The Kryptoqueen and other speakers of the Onecoin system have spoken at such events of the future in which bank money will be replaced by crypto money – by Onecoin. Everything would be fine, they promised, despite the many lies spread about Onecoin. Then sing. Cheers. Total ecstasy. The accused de Greven, who puts on his old reading glasses to read the indictment, is one of those speakers. His wife was the managing director of a company through which the money of Onecoin investors circulated abroad.
What was that currency worth anyway?
The court must now clarify fundamental questions: how to prove possible fraud with a digital currency? How do you prove that something should have no value when millions of people around the world believe in its value, some even locked in the digital echo chambers of the Internet, to this day? The criminal chamber of the regional court seems willing to venture into the murky zone where promises, if only often enough repeated, become independent realities. The Bielefeld prosecutor’s office had only accused the Greven couple of providing payment services without authorization, but the Münster criminal chamber added a legal note to the indictment. A conviction for money laundering and aiding and abetting fraud would also be considered, in each case in particularly serious cases.
The district court wants to get to the heart of a structure designed to disperse the legal responsibility of converting money into virtual securities. The final phase of a year-long cat-and-mouse game between German justice and Onecoin has begun.
The Greven couple reportedly received around 320 million euros from German investors between late 2015 and late 2016, most of which were transferred overseas for a 1% commission. They would have needed a license for this whether Onecoin is a legitimate product or not. The money went to a fund in the Cayman Islands and from there to various tax havens through a complex system of companies and intermediaries. The Munich lawyer would have helped. He reportedly sent critical investigation emails to bank workers to cover up the origin of the funds, 75 million euros had reached the Cayman Islands with his help. The public prosecutor accuses him of deliberate money laundering in two cases.
According to his lawyer, however, this proceeding concerns something that cannot be negotiated here. This is an absent person, “some call him the Kryptoqueen”. It is she who must be questioned. The fact that his client was aware of an alleged onecoin fraud is not part of the indictment. But without an underlying crime, without fraud, allegations of money laundering crumble. Because, despite years of investigations, there are no crypto-currencies sitting here, the prosecution pounces on its client. “There is evidence that other protagonists should be sitting here.”
Investors have become business partners
The defender of Greven’s man argues the same way. His client himself believed in the legitimacy of Onecoin and the value of the coins, otherwise he would hardly have sold his business to Ruja Ignatova at the end of 2015 – for a sum of millions which was partially paid into Onecoin.
The area of business in which Greven’s man was already active before Onecoin is called multi-level marketing. The Tupperware principle. Onecoin also worked after him. Investors automatically became independent business partners and were able to sell Onecoin packages containing cryptocurrency training material, as well as so-called tokens that customers could convert into Onecoin – allegedly only as a kind of extra. . Business partners received commissions for the sale of these packages, which cost up to 118,000 euros. If the people they sold packages to themselves sold packages, they got a portion of their commissions. And also customers of these customers, who in turn have become new business partners. Thus, pyramid-shaped structures were formed, along which part of the sales flowed – always upwards.
Multi-level marketing is legal under certain conditions. These companies often operate on the border between a legal marketing network and an illegal pyramid scheme. According to his defense attorney, Greven’s man is “a world-renowned businessman in multi-level marketing models and businesses for almost 40 years, with great international success.” The blog behind remlm.com warns of questionable multilevel sales marketing systems. If you search for his name there, you get 135 results.
What did defendants know about the alleged fraud, which is now dealt with in the absence of the “woman persecuted separately,” as she is called in the files? Did they even need to know in detail what constitutes a real cryptocurrency in terms of IT and finance? For a conviction for money laundering, according to the presiding judge, it suffices to admit that the money may come from fraud. Hence the extension of the indictment. The corners of the Munich lawyer’s mouth are lowered further when the president finishes the first day of the trial.