If you’ve heard anything about the biggest crypto scams in history, you most likely have heard of the OneCoin scam, also referred to as the most notorious crypto fraud with a mysteriously missing mastermind.
OneCoin was claimed to be a cryptocurrency with a state-of-the-art blockchain. It was created in 2014 by Dr Ruja Ignatova and her husband. At least, that was the story until the truth was revealed, and the supposed crypto project was exposed for the fraudulent scheme it was. There are details you may not have gotten about the OneCoin scam unless you’ve read extensively about it.
So, in today’s article, we’ll take a deep dive into the OneCoin scam and discuss how Dr Ruja Ignatova ripped people off billions of dollars.
How OneCoin Started
In 2014, a German woman named Dr Ruja Ignatova founded OneCoin Ltd and OneLife Network Ltd. The OneCoin cryptocurrency was created by the companies. According to Ignatova, Onecoin was an altcoin with a total supply of 120 billion. She claimed it would be minable and used for payments through crypto wallets. But no investor ever interacted with the coin’s blockchain or even saw a model.
Ignatova did one heck of a job creating a fairytale about a coin that did not exist. But while the coin was in the works (according to the “Cryptoqueen”), the company sold educational materials like cryptocurrency trading and investing courses. Selling those courses became the company’s primary focus.
Who is Dr Ruja Ignatova?
Ruja Ignatova presented herself as a credible individual with a degree from the University of Oxford, England. While there are little to no details about that part of her education, Ruja went on to obtain her PhD in International law from the University of Konstanz in Germany. There are also reports that she worked with McKinsey & Company.
In appearance, Dr Ruja is polished and elegant, so it must have been easy to convince the public that she was running a legitimate business. However, the best scams or fraudulent schemes are perpetrated by the educated. To date, Dr Ruja is missing. She has just entered the FBI’s Ten Most Wanted Fugitive list.
How OneCoin Was a Scam
OneCoin was a Ponzi scheme.
To begin with, the company proposed OneCoin as the next best altcoin, promising an unbeatable blockchain and algorithm. There was no evidence of a real coin. No blockchain or active trading either.
Moreover, the company sold courses to investors using a Multi-level Marketing scheme. Investors were to buy the course and bring other buyers for rewards. The company promised the buyers tokens that they could use to mine OneCoin.
At some point in 2016, people began to question the company’s operations as it came under the scrutiny of many countries. Some tagged it a pyramid scheme. Both the Direct Selling Association, Norway and the Hungarian Central Bank called OneCoin a scam in 2016 and warned people to avoid investing in it.
OneCoin craved approval desperately and created one for itself. In 2017, the company claimed that The Vietnamese government had licensed it as a digital currency. Of course, the Vietnamese government denied giving such approval.
That same year, the US District Court for the Southern District of New York issued a warrant for the arrest of Dr Ruja, but she disappeared. Her brother, Konstantin Ignatova, took over after she fled. He became the face of the company, though the co-founder, Sebastian Greenwood, was around.
The total amount the scheme made away with is $4 billion!
How Did The Operation Crash?
In early 2018, the Bulgarian Police stormed the OneCoin office for investigations. Co-founder Greenwood was arrested and taken into custody.
In 2019, the police arrested Konstantin Ignatova. He pleaded guilty to charges of money laundering and fraud while Greenwood attempted to sign a plea deal.
The mastermind of the operation is still nowhere to be found. However, she has earned a spot on the FBI’s Ten Most Wanted Fugitive list and is currently the only female on it.
Bottomline
The OneCoin scam took advantage of the buzz around cryptocurrency in the early 2010s to perpetrate the fraud. There was no cryptocurrency to mine, nor was there any blockchain. The founders simply ran a neat Ponzi scheme built around crypto. The OneCoin scam has been investigated, and the BBC has made a podcast about it.
For the most part, the authorities behind the company have been arrested. Still, the mastermind, Cryptoqueen Ruja Ignatova, is yet to be brought to book.
The lesson to be learned here is to evaluate crypto project till you have substantial evidence of its existence, authenticity, and safety. As we always advise, do your due diligence. You can identify a crypto scam if you know what to look out for in projects. Stay safe.
