By Elliott Stephanopoulos ’21
Cryptocurrency is a new digital wave that has shaken the globe since the release of Bitcoin in 2009. Bitcoin has been presented as an elite and private way to digitally exchange currency, products, and services through a “coin.” For highly successful and highly monitored people, Bitcoin presented the ultimate covert way to trade; you can trade anonymously, with no tie to any bank or country, without credit card fees, and most importantly, without a paper trail. Bitcoin has been a successful investment for savvy currency traders. As of August 14, one Bitcoin is worth $11,935 dollars.
As Bitcoin got more attention and rose in value, so did the number of people wanting to participate. Investing in Bitcoin appeared to be an easy way to “get rich quick” or become an “overnight millionaire” and be ahead of the wave of cryptocurrency. Everyone wanted an in on Bitcoin, but it is largely inaccessible.
In 2014, Bulgarian attorney Ruja Ignatova saw the opportunity to invent a new cryptocurrency that would benefit everyone, not just the wealthy and technologically advanced. She claimed that “OneCoin is easy to use, OneCoin is for everyone.”
To manipulate and coerce people into investing and buying OneCoin products, Ignatova played on anti-bank sentiment and promised the general public easy access to the benefits of trading cryptocurrency. Ignatova traveled around the world to conferences to market OneCoin and convince the public to overthrow Bitcoin and help OneCoin become the world’s most popular cryptocurrency. Ignatova’s curriculum vitae was impressive; she attended Oxford University, earned her Ph.D. at the University of Konstanz in Germany, and worked as a consultant at the renowned McKinsey and Company. Her ability to appeal to the greater public and “create” a product that could supposedly make everyone rich helped her draw in over €4 billion ($4.75 billion) in investor money, almost all within the six-month span of her global conference tour. According to the BBC, “€427m came from China in 2016, with people in South Korea, Hong Kong and Germany also keen investors. Even in poorer countries like Vietnam, Bangladesh and Uganda, people parted with substantial sums.”
However, investors and cryptocurrency experts began to research OneCoin’s technological background and found nothing. It lacked blockchain technology, which is necessary for any cryptocurrency to operate. Quickly, word began to spread that Ruja Ignatova was not actually interested in making the cryptocurrency usable and was, in fact, one of the greatest monetary frauds in history and the ultimate Ponzi scheme.
OneCoin began to be exposed as a scheme in late 2015 when the Bulgarian government warned its citizens of the scam of OneCoin. In 2016 and 2017, Finland, Sweden, Norway, Thailand, Germany, Belize, Vietnam, Latvia, Italy, Hungary, Croatia, and India began to issue warnings and encouraged their citizens not to invest or work with OneCoin.
In October 2017, Ruja Ignatova disappeared. She did not show up to her scheduled events, and no one had heard from her. The exposé continued beyond government officials when Timothy Curry (a Bitcoin user) began reaching out to OneCoin investors and exposing the reality of their investments. As Curry’s evidence that OneCoin was a scam spread, the leaders of the company began to feel the heat. Investors slowly but surely learned that no blockchain existed, the values of the coins were completely made up by employees, and their investments were unable to turn into real cash sums.
In May 2018, the Chinese government prosecuted 98 people involved in the OneCoin Ponzi scheme and recovered over $200 million. In November of 2019, Ruja Ignatova’s brother, Konstantin Ignatov, pleaded guilty in his involvement in the OneCoin scheme and agreed to cooperate with the US government. The New York Federal Court found lawyer Mark Scott guilty of participating in fraud and wiring over $400 million.
Since then, OneCoin has still been up and running despite the global investigations. Ruja Ignatova is still missing. She is charged in absentia with wire fraud, securities fraud, and money laundering and faces up to 90 years in prison.