People who think that all crypto is worthless may be confused by this. The actual reason was far more silly. They blatantly admitted to the scam in writing making it an open and shut case:
> OneCoin was a multi-level marketing (MLM) pyramid scheme
> As Ignatova allegedly put it in an email to Greenwood, "We are not mining actually – but telling people shit."
> OneCoin's value, according to the Feds, was simply set by those managing the company – they manipulated the OneCoin exchange to simulate trading volatility but the price of OneCoin always closed higher than it opened.
> Ignatova allegedly told Greenwood that one of the goals for the OneCoin trade exchange was "always close on a high price end of day open day with high price, build confidence – better manipulation so they are happy
> Email correspondence between Greenwood and Ignatova, as cited by the Justice Department, describes how the defendants referred to OneCoin privately as "trashy coin." And in an August 9, 2014 email exchange with Greenwood, Ignatova's first option on a list of possible exit strategies is said to have been, "Take the money and run and blame someone else for this…"
It's sad that the only reason this case was prosecuted is because the founders were stupid enough to admit to fraud in writing. How many blatant scams are out there where the founders are using purely euphemistic language & making sure to have short data retention periods (~1 yr is standard in businesses).