How did one woman fool millions of people into believing in her crypto scam to the point that she was able to steal over $4 billion and eventually make it into the list of the FBI's 10 most wanted persons? This is the story of greed, lies and crime, wrapped under a Ponzi scheme dubbed the "Bitcoin killer".
This is crypto forensics - OneCoin
The Beginning:
OneCoin was founded in 2014 by Dr. Ruja Ignatova, a charismatic Bulagarian woman. She earned a law degree from the University of Konstanz in Germany and went on to complete a Master's degree in Law and Economics from the University of Oxford in the United Kingdom. Later, she obtained a Ph.D. in Law from the University of Konstanz.
She was involved in a number of Ponzi schemes, but evaded sanctions from the Bulgarian government. In 2014, she came up with OneCoin, a "Bitcoin killer" that was going to make millions wealthy through "mining". People were to deposit money on a website she created where they are expected to get high returns on their investments. They also needed to recruit other investors to make more money.
How People Fell For Her Scam
You see, Dr. Ruja was a charismatic woman who speaks with a lot of authority. When she speaks, people listen. But it wasn't her words alone or how she said them that made people invest in her scheme. She had the support of big names in the entertainment industry who served as OneCoin spokesperson at several events.
One of such events was the "The OneCoin Mastermind" event that took place on October 24, 2016, at The Brewery, a venue located in the City of London. The goal of the event was to recruit more people into the scheme. In fact, Legendary footballer Diego Maradona was alleged to be a brand ambassador of OneCoin at some point.
OneCoiners are global citizens of a small world wanting to make a change - Dr Ruja
The Real Truth About OneCoin
While OneCoin was being promoted by Dr. Ruja and her associates as a cryptocurrency, the fact is that it was never a currency. There was no cryptography technology used. OneCoin was no different from the points you earn when playing video games. It was just some made up currency on her website, controlled by a software she had written for her.
So, when people deposit money on her platform, they see coins in their account. These coins increase whenever more money is added, or when someone registers through the user's referral link. Users could not withdraw immediately, however, as there was a lock up period of the "funds"
The Cracks
People began to raise eyebrows when no one could confirm that they have been able to withdraw money from the system. Rumors soon began to fly around about OneCoin potentially being a scam. Dr. Ruja and her team labelled these ones as "losers" who didn't understand the system. She encouraged her followers not to listen to people who question OneCoin or she herself.
Those who understood how crypto works could easily tell that this wasn't a cryptocurrency, and the warning bells was rung all around
The Fall
Soon enough, authorities in Bulgaria, Germany and the US took interest in the Ponzi scheme. Investigations revealed that it was truly a Ponzi scheme disguised as a cryptocurrency, and millions all over the world have deposited over $4 billion real money to into this woman's platform.
An arrest warrant was issued, but she somehow managed to escape. Her younger brother and PA, Konstantin, was arrested by the US authorities at the Los Angeles International Airport when he was trying to escape. Konstantin Ignatova cooperated with the authorities. His testimony provided insight into the deceptive practices, manipulation of funds, and the magnitude of the financial losses suffered by investors.
Where Is Dr. Ruja?
As for Dr. Ruja herself, no one knows where she is, not even her younger brother or anyone else who was close to her. Some say she had done face surgery, changed her identity, and moves to another country to have a fresh start at life.
However, the authorities are still on the hunt for her. By 2022, the FBI added her name in the list of the top 10 most wanted persons in the world, and a bounty of $100,000 has been placed on her head.
The Lessons
There are many lessons to be learnt from this scam by Dr. Ruja. I'll share some, and you can add yours in the comment section.
Always verify information before making any investment (DYOR)
If it seems to be too good to be true, it probably is
If the authorities outrightly call something a scam, we should believe the authorities
Conclusion
The story of Dr. Ruja will go down as one of the greatest scam in history, but it offers so many lessons for us. It also highlights the need for clear regulation in the crypto industry and why each person should always DYOR.
Follow for future crypto forensics!