The Story Of The Biggest Cryptocurrency Scam In History

Ruja Ignotova. For victims of the OneCoin scam, this name is one they wish they never heard, but ironically, it was once music to their ears. Four years ago, they would give her a standing ovation and name her the “crypto queen”, as she was about to make them a ridiculous return on investments.

Dr Ruja Ignotova, a Bulgarian, was the founder of OneCoin. A charismatic 36-year-old at the time, she began a movement that will have hundreds of people rallying round. Ruja founded OneCoin on the same philosophy of a decentralized currency that gave people control, and openly threw shots at traditional financial institutions whilst blaming them for the 2008 global financial crisis.

Ruja wasn’t just a random self-proclaimed financial messiah, she had the credentials to back her claims. An Oxford graduate, a Doctorate in Law, and a former Mckinsey employee, Ruja was known to easily run circles round top bankers. In addition, she had the charisma and a commanding persona that sealed the deal.

OneCoin’s growth was rapid. Within a few years of its launch, it already had over 3 million investors across the globe. Conferences and seminars were held from the UK to the US, and even Africa. It was gradually becoming a juicy investment. But by 2017, the truth will begin to surface.

How did she do it?

Ruja claimed OneCoin worked like any other cryptocurrency. It was connected to a blockchain, and could be used for payments. But in fact, it wasn’t. OneCoin was not even a cryptocurrency. It was just OneCoin, a name and nothing more. So why did they believe her?

Dr Ruja was clever. Her plan to get people to invest in something that was non-existent, was creative. 

The currency was sold in the form of educational packages. These educational packages came in different prices, ranging from $100 to $118,000. They contained courses on financial education. Most of the materials were actually plagiarised from other sources. 

The buyers were told that the money used in buying the packages would be converted to OneCoin, which had a value that had huge prospects of skyrocketing.

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The process that allowed people to change their coins into fiat currency was always under construction. There were endless delays. 

The information about OneCoin could be easily questioned by any investor, but the way Ruja presented the “life changing” investment is what got people going, enthusiastic to tell friends and family about the new opportunity to be wealthy.

OneCoin investors were like a community of people or family, if you may. Once investors come onboard they are added to WhatsApp groups and given inside information about the crypto. It was an “Us” versus the outside world set up that made people feel safe and a part of something big. It was almost like a religion. Members had greeting codes and the slogan: ” One Coin One Life”. 

Multi Level Marketing 

What other way to get people to invest in a communal way than multi level marketing. Multi level marketing essentially uses referrals. One person recruits someone who then recruits someone else and the loop continues. MLM (Multi Level Marketing) isn’t illegal, but it’s a legal means to an illegal end. In most cases, there isn’t really a product to be marketed. People just pay to join the network and a select few at the top actually make money.

Dr Ruja used MLM to peddle her fraudulent package. An article on BBC reported that Ruja contacted Igor Alberts, who became a millionaire through MLM, alongside other powerful MLM agents with enough downlines to generate her expected revenue. 

OneCoin’s quarterly revenue (BBC)

It worked. Some think it worked better than Ruja imagined. Igor, who was also oblivious to the fact that he was helping brew a multibillion dollar scam, generated € 1 million on OneCoin every month. According to Igor, “I did the calculation on how many coins we needed to become the richest person on the planet. When this coin goes to €100 and we have 100 million, we are richer than Bill Gates”. 

Igor unwittingly convinced innocent individuals to part away with their hard earned money. 

The Damage

The victims of Ruja’s plot will, till this day, find it difficult to recover from the assault on their financial wellbeing. Jen McAdams, who invested €10,000 of her own money, convinced friends and family to invest. The total amounted to €250,000.

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According to interviews and an article on the BBC website, when Jen saw the value of her OneCoin rise, she planned vacations and shopping sprees. 

In Uganda, Daniel, a 22 year old, gathered 700,000 shillings ($250) to buy the starter package. Raising the money took the assistance of Daniel’s parents. For a family living solely surviving off proceeds from peasant farming, $250 will most definitely leave a void in their wallets. 

Where is Dr Ruja?

Ruja Ignotova (OneCoin’s Founder)

Dr Ruja Ignotova was to have another one of her charisma dripping, spirit lifting conferences in Lisbon, Portugal, in October 2017, when she didn’t show up. 

While Dr Ruja remains at large till this day, some of her associates have been apprehended by law enforcement agencies. Co-Founder, Sebastian Greenwood, was charged with fraud in early 2018. Konstantin Ignotova, who took the reins after Raja’s disappearance, confessed that his sister created the scheme for the sole purpose of defrauding innocent people. Konstantin now faces a 90 year sentence.

The United States Justice Department describes the scheme as “an old-school pyramid scheme on a new-school platform”. This type of scam isn’t  unheard of, it’s almost a textbook procedure scam. 

Perhaps, Dr Ruja was able to leverage people’s desperate quest for wealth. Her use of emotions to get through to her unwitting investors is seen in her charismatic and optimistic speeches. 

“In two years, nobody will speak about bitcoin anymore”. Dr Ruja said this at one of her many conferences.

Lines like this reassured investors that they had struck gold and were about to become very rich. 

Another factor could be OneCoin’s branding, there was a face to it, there was a reference point to it. Ignotova created a brand culture, a community of people with similar ideologies— a feat that takes top brands years to achieve. Although there wasn’t a physical coin in sight, there was Dr Ruja Ignotova. Ignotova was OneCoin. 

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