The growth and popularization of Cryptocurrency as an actual currency hasn’t gone without criticism in the last decade. However, while there are normal concerns from the public and governments over the use of online currencies, none of those debates cover the extent of OneCoin’s millionaire fraud.
Despite the scheme lasting barely more than a couple of years after the company’s inception, OneCoin still managed to steal billions with their Crypto Ponzi Scheme. The most eyebrow-raising part of this case is the purposeful disappearance of OneCoin’s mastermind Ruja Ignatova, who has been on the run for several year, leaving authorities around the world without much of a clue to her whereabouts.
Now that several people have been condemned for fraud and with Ruja still on the run, many people want to know what’s up with OneCoin and when this case will come to an acceptable conclusion. Stay with us to find out!
Contents
Beginnings & Inner Workings
While OneCoin is as fraudulent as any other Ponzi scheme out there, this fake cryptocurrency stands out from others not only for how far it went, but also because it was mostly based on marketing tricks. The beginnings of OneCoin are traced back to 2014 when Bulgarian businesswoman Ruja Ignatova and UK citizen Karl Sebastian Greenwood teamed to set up the scam.
Right from the beginning, OneCoin was meant to be a Ponzi scheme which took advantage of people’s high expectations of the then-excitedly new cryptocurrency market to make quick money. The basis of OneCoin is distinctly different from other successful cryptocurrencies such as their declared rival BitCoin, which built its trust on the use of a blockchain, which is universally recognized as the most important basis of cryptocurrencies, as reported by BBC News.
On its part, there’s reportedly no blockchain to sustain OneCoin, rather a not-so-intricate but initially highly secretive pyramid scheme. This important and incriminating factor of OneCoin was warned as early as 2015 by The Cointelegraph, yet very few people were there to read the website’s report, and were instead getting drowned in the glittering marketing surrounding OneCoin and its charismatic leader Ruja Ignatova.
Main Actors
While many cryptocurrency experts would have identified the malicious nature of OneCoin, there were lots of factors which led people from different paths of life to become fascinated with it. The biggest convincing factor of OneCoin was the people who were the faces of the scheme, starting with the infamous ‘Cryptoqueen’, who convinced her increasing investors of the legitimacy of the scheme with several tricks.
First and foremost, OneCoin’s chief executive officer (CEO) Ruja Plamenova Ignatova presented herself as a trustworthy person. She moved from Bulgaria to Germany at a very young age, and lived there most of her life. According to Finshots, Ruja is an Oxford graduate, and holds a private law PhD from the University of Konstanz. As reported by the Wall Street Journal, Ruja also worked for the prestigious firm McKinsey & Company at some point.
All of these accomplishments are as real as they get, and Ruja didn’t hesitate to show them off during the OneCoin conferences offered between the scheming company’s inception and 2017. Nonetheless, she also exaggerated some aspects, reportedly showing a fake cover of Bulgaria’s Forbes with her face on it.
Other players in the OneCoin scheme are the British-Swedish marketing expert Sebastian Greenwood and Ruja’s brother Konstantin Ignatov, who became OneCoin’s head after Ruja.
First Consequences
Even though the first warnings about OneCoin’s fraudulent activity became known by 2015, the scheme was still in its early and most adrenaline-inducing stages. At that point, people firmly believed Ruja’s claims of OneCoin becoming the leader in Cryptocurrency, basing their blind faith on the coin in the passionate CEO’s discourse of starting a ‘financial revolution’.
As BBC News reported, it was hard for people not to be moved by Ruja’s words before investing their savings in a system which wasn’t producing any value, and compared to a cult by some experts. Nevertheless, cryptocurrency experts such as Bjorn Bjercke noticed right away the lack of blockchain behind the scheme, and warned others about it, though he reportedly received harassment and scary threats over his words.
However, it didn’t take long before governments and international agencies tried to stop OneCoin from taking people’s money. In September 2015, the Bulgaria government warned about the nature of OneCoin, followed in the next years by authorities in Finland, Norway, Sweden, Italy, and many others. Countries such as Germany took action against Ruja’s OneLife Network Ltd, which was duplicated by China, where the investments in OneCoin surpassed $200 million by far.
Legal Actions
Besides the legal actions taken against OneCoin in countries in Europe and Asia, other important developments to uncover the company’s schemes took place. In 2018, OneCoin’s co-founder Sebastian Greenwood, was arrested in Thailand and extradited to the US, where he was sentenced to 20 years in jail in 2023.
Ruja’s brother Konstantin Ignatov faced a similar fate: he was arrested in Los Angeles in 2019, and faced a long trial in which he was accused of participating in fraud and money laundering, with prosecutors affirming that he had illegally distributed $400 million of OneCoin’s money through several shell companies around the world. He pleaded guilty to money laundering, and fraud and was sentenced to 34 months in jail.
While other players involved with OneCoin’s scheme have been caught and sentenced, the same can’t be said about Ruja, whose whereabouts have been unknown for several years. According to reports, she didn’t make it to a OneCoin event in October, and later fled from Bulgaria to Greece, where her traces vanished.
However, in 2023, the investigation bureau BIRD claimed that Ruja had most likely been killed by an Eastern European criminal organization she had been involved in. The estimated amount she fraudulently made from OneCoin is $4 billion.
What Will Happen To OneCoin?
OneCoin shut down in 2017, following the discovery of its fraudulent activities. Nonetheless, the deep and blind faith which many put in it made it hard for many to accept the nature of the organization.
According to BBC News, the shutdown of OneCoin didn’t mean that its supporters disappeared right away. Some intentions of reviving the scheme were observed, even after the arrest of Greenwood and Ignatov, behavior which has been compared by experts to that of cults.
In the end, the damage done by OneCoin to the thousands of people who put their faith in it is irreparable – ‘buyer beware’!
