Around a year after claiming that OneCoin would be the "Number One cryptocurrency worldwide", the company's founder Dr Ruja Ignatova vanished without a trace. And now, Ignatova, who called herself "cryptoqueen", has been added to the FBI's Most Wanted List.
She is accused of masterminding a massive scam worth $4 billion, or around ₹26,000 crore. The Federal Bureau of Investigation is offering up to $100,000 for information leading to her arrest.
To evade arrest, Ignatova is believed to have changed her appearance, possibly through plastic surgery. She has been missing since 2017, when she boarded a flight from Bulgaria to Greece.
Ignatova went on the run after bugging her boyfriend's house over suspicion that he was cooperating with the FBI, which turned out to be true.
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With massive hype, OneCoin had managed to secure over 30 lakh investors from more than 100 countries. But how exactly did the scam work?
Investigators have called the case a Ponzi scheme with a "virtual twist". Basically, Ignatova's company sold OneCoin tokens which were worthless. Customers were promised high returns with low risk.
An exchange to convert OneCoin into real currency was never set up. Additionally, OneCoin was not backed by crypto-technology like blockchain, which is a decentralised digital ledger.
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Customers were also told to encourage people they knew to buy OneCoin. In return, these customers were given commission for selling the cryptocurrency.
Ponzi schemes usually collapse when fresh customers dry up, and the flow of money stops, as the main product has no real value. To keep investors enthused, Ignatova also claimed that an IPO was in the pipeline, but it never occurred.
Some arrests have taken place in the case. In 2019, Ruja Ignatova's brother Konstantin was arrested by the FBI. He reportedly pleaded guilty and struck a deal to cooperate with the government.
Along with Konstantin Ignatov, US corporate lawyer Mark Scott was convicted for laundering $400 million for OneCoin. However, the prominent face of the company remains at large.
Ruja Ignatova was born in Bulgaria in 1980. She speaks Bulgarian, English, and German. She studied law at Oxford, and also has a PhD from Konstanz university. She worked with consultancy firm McKinsey & Company before setting up OneCoin in 2014.
Ignatova made big claims about OneCoin, even calling it the "Bitcoin killer". However, OneCoin could not be traded, and could not be used for buying things.
Here are some of the other lies Ignatova told her victims.
The company claimed that OneCoin's value was based on market supply and demand. However, investigators said that the value was actually decided arbitrarily by Ignatova and the other conspirators.
Another fake claim was that OneCoin was secured by a private blockchain, as opposed to a public blockchain like other cryptos. Investigators said that there was no blockchain at all. The company also said that the crypto was mined via servers, but investigators said that the crypto was not mined at all.
The crypto market is going through a low phase these days, with investors worried about inflation, recession, and geopolitical tension. However, the digital assets periodically see a wild rise in value, attracting investors in large numbers.
But cases like OneCoin should act as a cautionary tale for investors looking to make easy money. With crypto regulations yet to catch up, people need to be careful about where they put their hard-earned cash.