OneCoin Pyramid Scheme Baffles Authorities, Cost Investors Billions

Rachel Curry - Author
By

Jul. 1 2022, Published 12:38 p.m. ET

Bitcoin’s pseudonymous creator Satoshi Nakamoto still baffles the masses, but the face behind fraudulent cryptocurrency OneCoin is much more sinister. Ruja Ignatova collected about $4 billion from investors through her pyramid scheme OneCoin before catching a flight to Greece and vanishing. Ignatova’s whereabouts remain a mystery and the FBI has added her to their '10 Most Wanted' list.

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While Ignatova may still be on the run, global investigators now recognize OneCoin (the supposed “Bitcoin killer”) as a pyramid scheme, a method that helped its creator get rich quickly and get out of dodge.

Meet Ruja Ignatova, the one who scammed investors out of billions through OneCoin.

Born in Bulgaria in 1980, Ignatova and her family moved to Germany a decade later. Ignatova holds a Ph.D. and even worked for McKinsey & Company for a period of time.

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Ignatova has a freckled criminal history. In 2012, a German court convicted Ignatova of fraud when she and her father purchased a company that then went mysteriously bankrupt. A year later, she got involved with a cryptocurrency pyramid scheme called BigCoin. She came on the scene with OneCoin in 2014.

Rather than a decentralized cryptocurrency like Bitcoin, OneCoin was centralized for OneCoin Ltd. OneCoin marketed itself as a company selling trading education. However, OneCoin recruiting meetings were reportedly centered around cryptocurrency trading itself.

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Ignatova secured about $4 billion for herself and, in October 2017, flew a Ryanair flight from Sofia, Bulgaria to Athens, Greece. She hasn’t been seen since.

The FBI added Ignatova to '10 Most Wanted' list for the OneCoin pyramid scheme.

In 2019, authorities arrested Ignatova’s brother, Konstantin Ingatov, for his connection to the scheme. Now, the search for Ignatova is ramping up. German police confirmed they located a money laundering clue. Ignatova reportedly wired nearly €7.7 million into the private account of a German lawyer a year before her disappearance.

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Ignatova is on the FBI’s '10 Most Wanted' list for OneCoin. Numerous governments have dubbed OneCoin a pyramid scheme, which operates on the premise of a chain of recruitment that financially benefits individuals who are higher up on the chain. Pyramid schemes are also called multi-level marketing schemes.

According to U.S. attorney for the Southern District of New York Damian Williams, Ignatova is “an international fugitive who allegedly masterminded a worldwide fraud.”

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Is OneCoin still operating?

In reality, OneCoin never operated at all. While OneCoin advertised as a blockchain-backed currency, the blockchain was reportedly nonexistent. The coin’s price was entirely made up and there was no real currency trading at all. Despite Bitcoin’s volatility, its transactions are real and the blockchain technology does indeed exist.

Former assistant director-in-charge of the FBI William Sweeney Jr. said about OneCoin in 2019, “OneCoin was a cryptocurrency existing only in the minds of its creators and their co-conspirators. Unlike authentic cryptocurrencies, which maintain records of their investors’ transaction history, OneCoin had no real value. It offered investors no method of tracing their money, and it could not be used to purchase anything. In fact, the only ones who stood to benefit from its existence were its founders and co-conspirators.”

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