OneCoin - The $4 Billion Scam

The story of one of the largest Ponzi schemes in history

Dr Ruja Ignatova was known as the ‘Cryptoqueen’ and in a three-year period, managed to fleece her investors of an incredible $4 billion USD before disappearing. Her whereabouts are still unknown.

This is the remarkable story of ‘OneCoin’, one of the greatest scams ever committed.

Who is Ruja Ignatova?

Born in Sofia in 1980, Ruja Ignatova moved with her family to Germany when she was 10. She earned her PhD in European private law from the University of Constance in 2005.

Somewhat ironically, she didn’t seem a big fan of the law. In 2012 she was convicted of fraud by a German court. The case was connected to her and her father, Plamen Ignatov, and their acquisition of a company that was almost immediately declared bankrupt in highly suspicious circumstances.

Ignatova only received a suspended 14-month sentence and this clearly didn’t put her off her criminal path.

A year later in 2013, she realized that cryptocurrencies were going to be a big thing and Ignatova wanted in. Despite her previous conviction, she was still well-respected due to her academic credentials and so when she started a multi-level marketing scam called Big Coin, she had a lot of backers.

Unfortunately for her investors, the Big Coin scam was soon discovered for the fraudulent enterprise that it was, and it was consequently shut down.

Undeterred, in 2014, Dr Ruja Ignatova started OneCoin with her brother Konstantin Ignatov in collaboration with Sebastian Greenwood.

How did OneCoin work?

You didn’t actually buy OneCoins. If you wanted in, you bought a package that ranged from a €100 EUR Starter pack up to… well, different sources give different figures. At an event in London, there was a £28,000 ‘Special Combo Package’ on offer and according to one industry blog, in October 2016, there was the introduction of a €188,888 EUR ‘Supreme Trader Package’ and an even more impressive €225,500 EUR ‘Super Combo Package’.

These packages didn’t include OneCoins, they included ‘tokens’ that could be later exchanged or assigned to ‘mine’ OneCoins. It was claimed that the mining took place on servers located in Bulgaria and Hong Kong. Each package also came with promotional/educational materials that were later revealed to have been plagiarized from multiple sources.

These materials were rarely mentioned at meetings. What was mentioned at meetings and events was how insanely rich everyone was going to get. Some deals included ‘splits’ where your money can double as if by magic. The €5000 EUR ‘Tycoon Trader Package’ for example, immediately split and became €10,000 EUR. Which is a bargain.

This was all without the OneCoin even going up in price. The possibility that it might drop in price was, curiously, never discussed. Like all good schemes, it was best to get in quick. There was the added incentive that if you enlisted new recruits, you got 10% of whatever they invested.

Although this had all the hallmarks of a Ponzi scheme, there was always the promise of ‘mining’ OneCoins and the OneCoin exchange called Xcoinx. On Xcoinx investors could swap some of their tokens for fiat currency but it was only a limited amount that depended on the membership package.

What shocked those in the industry most was, despite all the warning signs, the incredible demand for OneCoin.

OneCoin’s popularity was cult-like, bolstered by lies and marketing

People who invested in OneCoin obviously wanted it to succeed. Their commitment was strengthened by the aggressive marketing surrounding the scheme and wild unsubstantiated claims. So many people wanted to hear Ruja Ignatova and other founders speak, it essentially became a cult.

To ignore those who mocked or warned against the OneCoin, followers were encouraged to have an ‘us vs them’ mentality. People who recommended caution or spoke against it were dubbed ‘haters’ by Ignatova and the other promoters like her brother and Sebastian Greenwood.

At lavish events, such as the ‘Coin Rush’ spectacle held at the SSE Arena in London, Ignatova dubbed the OnceCoin the ‘Bitcoin killer’. Members even had a sign to greet each other, their thumbs and forefingers touching in the shape of a circle. Presumably to represent the ‘O’ of One. Although, as people pointed out mockingly, it could also be a zero.

It was also claimed by the promoters in early 2016 that OneCoin was ranked the second most valuable cryptocurrency in the world by market capitalization, with a market cap of $3 billion. In first place was bitcoin, with $5.7 billion. Yet a glance at any website that valued currencies revealed a different picture — OneCoin didn’t appear at all.

Surely people warned that it was a scam?

There were plenty of naysayers and ‘haters’ of OneCoin but the members were too in thrall to the idea to listen. The marketing and cult-like devotion to Ignatova was hard to overcome.

One of the prime arguments against it was the fact that unlike other cryptocurrencies, there was no blockchain or network. All the data was simply stored in a database. The OneCoin was essentially worthless and purely imaginary.

Those familiar with cryptocurrencies were outspoken and numerous cautionary articles were written in a number of publications. In May 2015, for example, the website Cointelegraph wrote:

OneCoin, a purported cryptocurrency and trading venture based out of Bulgaria, is suspected to be a pyramid scheme with no verifiable evidence to back up any of its business claims. https://cointelegraph.com/news/one-coin-much-scam-onecoin-exposed-as-global-mlm-ponzi-scheme

In February 2016 the British newspaper The Mirror wrote an article entitled: Who wants to be a OneCoin millionaire? YOU don’t — here’s why hyped-up web currency is virtually worthless. (Source.)

Governments and institutions started to warn against the currency but people still bought in.

The scheme finally starts to unravel

Ignatova claimed in early 2016 that OneCoin would be getting a new and improved blockchain and that as a consequence, every member would double their money.

However, two weeks after announcing this, it emerged that Bjorn Bjercke, a well-known and respected figure in cryptocurrency development, was approached to be OneCoin’s chief technical officer. He was also asked to develop an actual blockchain. He refused.

Other claims, contradictions and flat out lies started piling up. In March 2016, the exchange was closed to make way for a new one. The new exchange never appeared.

Increasingly, throughout 2016 and 2017, governments started to warn against the currency calling it fraudulent and likening it to a Ponzi scheme. In India, people started to get arrested for organizing OneCoin recruitment events.

Even so, the scheme continued and people kept buying membership packages.

Things really started to fall apart when, in October 2017, Dr Ruja Ignatova disappeared. Remarkably, her brother Ignatov continued with the scam for another two years. He was finally arrested in Los Angeles in March 2019.

Although Ignatov admitted fraud and immediately spoke out against his sister, Ignatova and an estimated $4.4 billion USD had gone. Some sources have claimed as much as $19.4 billion USD but it is impossible to say for certain.

Ignatova and most of the money have never been seen since.

What was the aftermath?

The fraud was on a global scale. OneCoin claimed membership of 3.5 million people although, like with so many of their claims, this was probably an exaggeration. What is certain is hundreds of thousands lost a lot of money.

Around the world, support groups have sprung up and various governments and institutions are still pursuing the money. For example, Chinese law enforcement officials recently managed to recover around $267 million USD.

The repercussions are still being felt. The cult-like brainwashing involved has meant that some reported victims remain in denial that it was all a scam. The prosecutions continue globally with arrests of OneCoin promoters in Singapore and prosecutions in the USA. Some have taken matters into their own hands with two OneCoin promoters recently being murdered in Mexico.

With the arrest of Ignatova’s brother and the closing down of the website, the scam has slowed almost to a halt. However, remaining OneCoin officials still exist and Dr Ruja Ignatova is still at large along with a sizeable chunk of money.

Worryingly, scams like this seem to be on the rise.

In October 2020, it was announced that Kate Winslet will star in a film about the OneCoin scam based on a book written by one of the victims. This film will be called ‘Fake!’.

Hopefully, it will make people think twice when things seem too good to be true.