OneCoin Scam: Crypto Coin That Didn’t Exist

 How one woman conned the world into investing billions, and then she disappeared!

Ruja Ignatova

Con artists making outrageous schemes aren’t a new thing. They have been deceiving people from the earliest of times. Victor Lustwig sold the Eiffel Tower, twice. Indian con artist Natwarlal sold the Taj Mahal, Presidential house, and the Parliament of India. When OneCoin made its entry into the crypto world, nobody suspected it would be doubted as one of the biggest scams in history.

This is the story of a woman who fooled the whole world and disappeared with reportedly $15 billion.

‘this girl is on fire’ – was running in the background when Dr. Ruja Ignatova, the founder of OneCoin, walked on the stage at Wembley in July 2016. She was wearing an expensive red gown and diamond earrings. She presented herself as the new messiah of the cryptocurrency world. She had the credentials. She had a Ph.D.; she studied at Oxford; She worked for Mckinsey.

Dr. Ruja promised big. She talked about turning OneCoin into the biggest cryptocurrency in the world. She sold a dream of re-creating the global economy. She trashed her competitors such as Bitcoin. She promised to fix many of the so-called issues cryptocurrencies have. But, there was one big problem – the cryptocurrency didn’t exist.

Talk at Wembley

The Loophole

Jen McAdams – an OneCoin investor – received a heartbreaking voicemail in April 2017. Though the mail was supposed to be ensured, it was the use of a term that shake the earth under her feet. By then, she had already invested thousands of euros at OneCoin and persuaded her friends and family too to invest more than 200,000 in the cryptocurrency. Months later, she was contacted by a stranger, Tim Curry, who called himself ‘a good Samaritan’. He claimed with utmost confidence that OneCoin is a scam.

Relentless persuasion from Tim forced Jen McAdams, who was a strong believer of OneCoin, to begin questioning the reliability of the currency. She kept asking her community advisor if there was any Blockchain. Finally, she received the Voicemail, which claimed OneCoin had their own Blockchain, a SQL server with a database. By then, she had learned that a standard SQL server isn’t a Blockchain thing.

Blockchain is the technology that ensures the credibility of the cryptocurrency. The concept of digital currency has been in discussion for a long time. The introduction of Blockchain technology finally made that possible. Blockchain is a digital ledger that is distributed in the network. Everybody in the network has a copy of it. Every transaction is recorded into every computer. Nobody is solely in control. OneCoin didn’t have this essential technology.

Cryptoqueen

The Cryptoqueen – how did OneCoin do it?

Bulgarian entrepreneur Dr. Ruja Ignatova was a commanding woman with a brilliant background. She moved to Germany with her family when she was only ten. She studied economics at the University of Konstanz. She moved to Oxford for higher studies. She started her career at McKinsey, which is a reputed consulting firm. She was bold and confident. She could pursue big investors and auditors.

She emerged as the founder of cryptocurrency OneCoin in 2014 and quickly became a celebrity in the cryptocurrency sector. OneCoin was gaining momentum. By 2016, it had gained a market value of $4 billion, earning the second spot behind Bitcoin. It was the time when cryptocurrency was getting the spotlight.

 

Playing according to the need

Paid Forbes Advertisement which was falsely marketed as Forbes Cover

Every now and then, people wonder if they have missed an opportunity. Bitcoin had become the biggest cryptocurrency. Its value had soared from few cents to hundreds of dollars. Dr. Ruja appeared at the right time with a sense of opportunity. She told her investors they haven’t missed anything. OneCoin has arrived.

Dr. Ruja called herself cryptoqueen. She termed OneCoin as the Bitcoin killer. She said ‘in two years, no one will be talking about Bitcoin’. She trashed other competitors as ‘Mickey Mouse’.

Investors were sold a vision of rebuilding the world economic system. A classic us vs them card was carefully played. The promise of OneCoin was to democratize the economic system, which would take away controls from the traditional banks and governments and distribute it back to the people.

Attacking the competitors

OneCoin promised to solve multiple so-called issues. In her big night at Wembley, Dr. Ignatova mentioned a few problems Bitcoin has. The number of total Bitcoins is limited. Miners have to constantly work to create a new coin. However, Bitcoin mining isn’t an easy job. It takes more than a year to mine a Bitcoin, Ignatova claims. The Blockchain technology Bitcoin uses has a safety period. Every transaction requires ten minutes to complete. This is a method used to ensure safety.

In her talk, Dr. Ruja claimed OneCoin will solve the issue. OneCoin will be able to process transactions within minutes. This characteristic will make the cryptocurrency merchant-friendly. The currency will be flexible and anyone can use it. It was also declared that the number of OneCoin will be 120 billion, which is 20 billion more than Ripple. With bundles of promises, OneCoin claimed to rewrite economic philosophy within few years.

The flood

OnceCoin was promoted vigorously. Plenty of seminars, webinars, events, and meetings were organized to promote cryptocurrency. It quickly spread like wildfire and reached dozens of countries. From Europe to Africa – it was available everywhere. Millions of believers started investing in it. People started breaking their savings to invest in the new fad. Reportedly, investment accumulated to at least 4 billion euros. According to rumors, the number reaches as high as $15 billion.

Promotion didn't stop

The Revelation

The cracks in OneCoin soon began to appear. It didn’t have a dedicated Blockchain –which is a critical element of any cryptocurrency. Blockchain expert Bjorn Bjercke revealed that he was contacted by OneCoin to build a Blockchain. He started criticizing OneCoin publicly for which he received threats, according to him.

OneCoin talked about revolution. It offered a new ecosystem, which is far more different than other cryptocurrencies. But, it sold its products in the form of packages. It lured its investors into buying a variety of packages – ranging from 400 euros to as high as 118,000 euros. The model was increasingly becoming clear. It required its users to recruit new users and make them invest their money. Sounds familiar? Yes, OneCoin was nothing but a sophisticated Pyramid Scheme at the end of the day. It was multi-level marketing at best. In Pyramid Scheme, people make money by recruiting others.

The whole cryptocurrency revolution was a big fraud.

The End

Concerns regarding OneCoin were quickly rising. Critics were expressing their voices publicly. In October 2017, Dr. Ruja Ignatova suddenly vanished mysteriously without a trace. She had a promotional event in Portugal, but she didn’t appear, which an anomaly to her punctual personality. Her last trace was found in Greece. The US Justice Department issued an arrest warrant against her, but she wasn’t found since then.

After the shocking disappearance, Ruja’s brother Kostantin took charge of the company. He tried to operate the business. However, in 2019, Kostantin was apprehended by the FBI at Los Angeles airport. Multiple charges of money laundering and fraud were filed against him. He is now serving a 90-years term in jail.

Kostantin Ignatova (Brother)

It is rumored that several shadow organizations and international criminal gangs were involved in the global scam.  

Dr. Ruja Ignatova was right about the upcoming boom she mentioned in her talk. She predicted that the cryptocurrency market will surge and it will take over the world in the future. Bitcoin is still the biggest cryptocurrency in the world. It gained a ridiculous value of around $60,000. Other competitors she mocked are also doing well. Cryptocurrency has given rise to nun-fungible tokens.

However, OneCoin took the wrong turn. Dr. Ruja understood human nature and behavior. She exploited the basic instincts and vulnerabilities of human nature. Instead of becoming the biggest cryptocurrency in the world and revolutionizing the economic system, OneCoin has turned into one of the greatest scams in modern human history.