OneCoin was a cryptocurrency-based Ponzi scheme orchestrated by OneCoin Ltd. and OneLife Network Ltd., led by Bulgarian national Ruja Ignatova who vanished mysteriously in 2017 after the scam amassed a whopping $4 billion.
- OneCoin ensnared $4 billion from 2014 to 2016
- Not actively traded, nor usable for purchases
- Founder Ruja Ignatova is missing; Co-founder Sebastian Greenwood is imprisoned in the U.S.
- Core business revolved around allegedly plagiarized course materials
- Operated like a multi-level marketing (MLM) scheme, motivating course purchasers to recruit new participants
Understanding OneCoin
Ruja Ignatova launched OneCoin in 2014, promoting it as a typical cryptocurrency. The narrative was that 120 billion OneCoins could be mined and used for transactions, supported by an e-wallet system. In reality, there was neither a blockchain model nor a functioning payment infrastructure.
Core to OneCoin’s operations was selling educational materials on cryptocurrencies along with trading and investing. This tied into a multi-level marketing (MLM) scheme, rewarding participants for bringing in new course buyers. Critics alleged most of the course content was plagiarized.
The OneCoin Exchange
OneCoin had its own internal exchange, xcoinx, for converting OneCoin into other currencies. Access was limited to members purchasing beyond the basic package, with selling restrictions based on the education package level.
In January 2017, this exchange was shut down, amid a slew of denied withdrawal requests. This internal marketplace was the sole means for affiliates to cash out.
OneCoin Exposed as Fraud
Scrutiny intensified in 2016 with various countries, including Norway and Hungary, classifying OneCoin as a pyramid scheme. The Vietnamese government refuted OneCoin’s claim of legal license in 2017.
By early 2018, Bulgarian police raided company offices. Ruja Ignatova disappeared in 2017 following an arrest warrant. Her brother, Konstantin Ignatov, tried to fill the leadership void. Co-founder Sebastian Greenwood was arrested in 2018, succeeded by Konstantin’s own arrest in November 2019.
Konstantin Ignatov admitted to fraud and money laundering charges. Meanwhile, Greenwood is reportedly negotiating a plea deal. OneCoin was never a tradable currency nor a medium for actual purchases.
Where Is Ruja Ignatova?
Known as Cryptoqueen, Ruja Ignatova has remained out of sight since fleeing in 2017.
The Biggest Crypto Ponzi Schemes
Several other major crypto scams have surfaced after OneCoin:
- Bitconnect, shuttered in 2018, resulting in $3.5 billion losses for its investors.
- PlusToken, halted in 2019 after it tricked investors out of $3 billion.
- GainBitcoin, an India-based scheme, deceived investors out of over $300 million before being busted.
- Mining Max, a $250 million scam, was shut down by authorities in 2021.
Understanding Bitcoin’s Value
Bitcoin values are volatile; as of September 2023, Bitcoin was trading at $26,551, having fluctuated between $26,000 and $67,500 from June 2021 to September 2023.
Related Terms: Bitconnect, PlusToken, crypto scams, Bitcoin value, multi-level marketing.
References
- U.S. Department of Justice, Southern District of New York. “Co-Founder Of Multi-Billion-Dollar Cryptocurrency Pyramid Scheme OneCoin Pleads Guilty”.
- Coindesk. "$4B Ponzi Scheme OneCoin and ‘CryptoQueen’ Leader Found in Default in US Lawsuit".
- Skadden. “Case 1:19-cv-04074-VEC, Document 216, Donald Berdeaux and Christine Grablis vs. Onecoin LTD.; Ruja Ignatova; Sebastian Greenwood; Mark Scott; David Pike; Nicole J. Huesmann; Gilbert Armenta; and The Bank of New York Mellon”, Pages 2, 4.
- U.S. Department of Justice, Southern District of New York. “Co-Founder Of Multibillion-Dollar Cryptocurrency Scheme OneCoin Sentenced To 20 Years In Prison”.
- Skadden. “Case 1:19-cv-04074-VEC, Document 216, Donald Berdeaux and Christine Grablis vs. Onecoin LTD.; Ruja Ignatova; Sebastian Greenwood; Mark Scott; David Pike; Nicole J. Huesmann; Gilbert Armenta; and The Bank of New York Mellon”, Page 2.
- Bitcoin.com. “Buyer Beware! The Definitive OneCoin Ponzi Exposé”.
- U.S. Department of Justice, Southern District of New York. “United States of America vs. Konstantin Ignatov”, Page 12.
- Hungarian National Bank. “Action against OneCoin was discussed by the Market Surveillance Working Group”.
- Coindesk. “OneCoin ‘License’ is a Fake, Says Vietnamese Government”.
- Cointelegraph. “Bulgarian Police Raids OneCoin Offices, ‘Ponzi Scheme’ Servers Shut Down”.
- United States Department of Justice, Southern District of New York. “Manhattan U.S. Attorney Announces Charges Against Leaders Of OneCoin, A Multibillion-Dollar Pyramid Scheme Involving The Sale Of A Fraudulent Cryptocurrency”.
- Skadden. “Case 1:19-cv-04074-VEC, Document 216, Donald Berdeaux and Christine Grablis vs. Onecoin LTD.; Ruja Ignatova; Sebastian Greenwood; Mark Scott; David Pike; Nicole J. Huesmann; Gilbert Armenta; and The Bank of New York Mellon”, Page 2,8.
- CoinMarketCap. “5 of the Biggest Crypto Ponzi Schemes”.
- CoinMarketCap. “Bitcoin”.
