OneCoin: Fake It ‘Till You Make It

On Friday 8th of March, 2020, the U.S. Court of Manhattan unsealed an indictment against the perpetrators of what is to this day the biggest cryptocurrency scam ever: OneCoin. 

by Felix Morrison

Led by Dr. Ruja Ignatova, branded The Crypto Queen, thousands of people all around the world fell into one of the simplest yet clever schemes ever played.

The most astonishing aspect of this story, is that OneCoin, supposedly a cryptocurrency running on its own blockchain, never existed.

OneCoin is a case example of how credibility can be easily manufactured, sold and bought when packaged properly. In an era where ‘fake it ‘till you make it’ has taken on the most extreme literal sense this cryptocurrency scheme galvanized all the elements of unobtainable wealth into a perfect storm.

The Bitcoin Killer

Starting in 2014 after Bitcoin’s price hit $1-thousand, OneCoin set out to bring the crypto world to the general public. Unfortunately they did not decide to contribute to this emerging scene, but rather exploit it. They set up their operation as your typical multi level pyramid scheme, similar to many other get rich quick scams that have existed before with a new buzzwords: cryptocurrency and blockchain.

Introducing a wide audience to cryptocurrency inevitably included bringing in a large sector of the population with no knowledge of how blockchains work. Disguised as a trading education program, Investors would buy packages that included reading material, webinars and tokens to mine OneCoin. Their seminars rarely touched on any on the reading material and focused mostly on investing in the cryptocurrency.

Investors could freely buy education packages to get more OneCoin, but in truth there was no actual exchange where it could be traded for real money. This meant that the price of cryptocurrency was not determined by demand and supply, but simply by the whim of Dr. Ignatova and her accomplices.

Promising unimaginable profits and introducing a multi level marketing strategy where investors were rewarded with commissions, OneCoin’s growth would become exponential, leading more and more people to invite friends, relatives and business associates into a lethal trap.

Dr. Ruja Ignatova: The Crypto Queen

One of the most fascinating aspects of this story is the figure of Dr. Ignatova. Having graduated with a PhD in Law in the University of Konstanz she amazed her peers with her insight on the future of banking after working in the financial sector during the crisis of 2008. Combined with her stage presence, fine silk dresses, lavish jewelry and her signature red lipstick and fiery rhetoric about the power of cryptocurrency, she played the part of a strong revolutionary businesswoman flawlessly. 

Ignatova become the leader of a cult-like community, one that would ignore every attempt of journalists, whistle-blowers and authorities to show OneCoin as the scam it truly was.

The truth was that OneCoin was not a real cryptocurrency. Not only it could not be traded or used in any way, the blockchain simply did not exist. All the supposed investments of over $4-billion USD were not residing in an encrypted secure environment but in a SQL database, meaning that it could be manipulated, destroyed, hacked or lost at any time.

In order to promote the growth of her followers, Ignatova pulled infamous stunts such as pretending to have been featured on the cover of Forbes Magazine when it actually it was just a paid advertisement. Ignatova manipulated social media by renting out facilities associated with famous brands and recruiting celebrity marketers.

All these elements put together proved to be very successful in portraying OneCoin as a true financial revolution that would change the world.

Whatever happened to the Crypto Queen?

In 2017, Ignatova was tipped off regarding a sealed indictment by U.S. authorities and dropped out of sight. Her brother Konstantin Ignatova took over the business but was arrested in Los Angeles in March 2016.

Her other collaborators, Karl Sebastian Greenwood and her lawyer Mark Scott, were also indicted and are currently awaiting trial.

So far no one has seen or heard from the Crypto Queen and her mysterious disappearance started a series of rumors such as her having had plastic surgery and pinpointing her location at places around the world such as Germany, Russia, Dubai and Bulgaria.

Evidence uncovered on the fascinating podcast by Jamie Bartlett, “The Missing Crypto Queen,” aired last year in BBC, and seems to suggest also that there might be another side to this story.

The theory posits that Dr. Ignatova started out OneCoin as a small-scale scam that went out of control. This might have included investments from sectors belonging to the criminal underworld of Eastern Europe, which would inevitably force the original creators out of leadership. Internal sources as well as statements from the FBI seem to suggest that Konstantin had ties to organized crime in Bulgaria, giving more weight to the idea that this operation simply got too big.

It is undeniable that from the start this project was a scam, but it is also true that before her disappearance Ignatova had been trying to hire a programmer to start working on an actual blockchain.

We will never know if this was simply to protect herself in case of possible law enforcement scrutiny, or it was a faint attempt to legitimize what had already been a criminal enterprise. Currently most of the creators and associates of OneCoin are either awaiting trial or have vanished.

OneCoin must turn into a cautionary tale about how an old scam can be brought back to life with a very simple twist. In a time when fake news, advertisements and social media can create a credible alternate reality many people can fall prey for any highly influential individual.

The Missing Crypto Queen – Jamie Bartlett (BBC)

Press release about OneCoin – Department of Justice, US


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