The OneCoin scam, done by self-proclaimed “Cryptoqueen” is one of the most notorious cryptocurrency frauds in the history of cryptocurrency. This was a Ponzi scheme that began in 2014 till 2017 and defrauded investors worldwide of nearly $4 Billion dollars.
This scam trapped multiple investors and the mysterious disappearance of cryptoqueen have captured a lot of attention from the world leading to ongoing investigations. Let’s get to know more about this scam below.
The OneCoin Scam
OneCoin was created as a revolutionary digital currency that would complete and surpass the cryptocurrency giant Bitcoin. This company was founded by Ruja Ignatova, a Bulgarian born entrepreneur. She was a PhD in law from the University of Konstanz. She promoted OneCoin through flashy presentations and used multilevel marketing tactics. She promised investing enormous returns and become a big part of the “financial revolution”. Sixteen months later, she boarded a plane in Sofia, Bulgaria and vanished from the face of the earth and she has not been seen ever since.
Her OneCoin scheme was similar to a Ponzi scheme structure where early investors were paid with money from new recruits, creating an illusion of profitability. But, like other cryptocurrencies, OneCoin did not have any blockchain, no real value and it couldn’t be traded freely.
The “coins” existed only on a centralized database which was controlled by the company. The scheme was a pyramid scheme with layers and defrauded people out of more than $4 billion dollars because she convinced people to invest loads of cash in her company. She is also now one of the most wanted fugitives on the FBI’s 10 most-wanted peoples list. Even the court documents stated that she knew it was the scam from the start.
Victims Of The OneCoin Scam
OneCoin’s victims can be found around the world from Asia to Africa and North America. Many victims were odinary people who wanted to capitalize on the cryptocurrency rise and others were experienced investors who also fell for this full-planned scheme.
Entire communities in Uganda invested money in OneCoin and were severely effected because they already belong to country with low financial rates. Many people sold their valuables, invested their life savings and took loans just to earn through this cryptocurrency that promised them the financial freedom they dreamed of.
This notorious and traumtising scam mainly targeted immigrant communities in countries like the UK, exploiting trust networks and world-of-mouth marketing. One of the most striking and hurting result of this scam was how it affected relationships of people. Many people advertised OneCoin among their friends and families recuriting them to invest in it, unknowingly making them the victims as well. This crypto scam completely changed the lives of people, commuities and ruined families.
Investigations Of OneCoin Scam
With time, suspicion of people grew which led various countries to start investigations aginst OneCoin. In the year 2015, the Bulgaria Financial Supervision Commission first issued a warning that OneCoin can be risky. Then by 2016, multiple countries like Sweden, Finland and Latvia took actions against OneCoin by issuing warnings and they also initiated criminal investigations.
The turning point in the scene came in 2017, when the United States Department of Justice accused Ruja Ignatova and many other associates with the charges of security fraud, wire fraud and money laundering case. After this there were mutlitple arrests and legal actions against OneCoin around the world.
One of the most important aspect of these invesitgations was Ignatova’s brother, Konstantin Ignatov. He took over OneCoin operations after her disappearance. He was arrested in March 2019 at Los Angeles International Airport. After some time he pleaded guilty to money laundering charges and fraud as well.
In June 2022, FBI added Ruja Ignatova in its ten most wanted list also offering a $100,000 reward for any information about her.
Also, Read: The Rise Of Crypto Giveaway Scams: Stay Alert!
Aftermath Of OneCoin Scam
The collapse of OneCoin Scam left a trail of financial devastation. Many victims invested their whole life’s savings in this cryptocurrency only to be scammed and scarred for life. Several support groups emerged to help people cope with their losses.
This scam was an eye-opener for the people worldwide who invest in cryptocurrency calling for well-thought decisions before investing. Despite the ongoing investigations a huge chunk of money is still unrecovered.
