The Strange Case Of The The Missing Crypto-Queen
The BBC Sounds audio streaming service recently released an investigative podcast hosted by Jamie Bartlett all about Dr Ruja Ignatova (pictured) . She is the woman alleged to be behind what could be the largest crypto-currency scam of all time. The US Department of Justice called it, "old fashioned pyramid scheme on a new school platform". In 2017, Ruja disappeared. She hasn't been seen since.
The podcast investigates what happened after she vanished, as the team travels to Germany, Uganda and Bulgaria in search of the self-proclaimed 'Cryptoqueen'.
By 2016, Ruja’s company OneCoin, claimed to have more than 3.5million users worldwide, plus hundreds of thousands of investors who were promised huge returns. The BBC reports that investors from the UK alone put at least £26m into the scam over one six-month window in 2016.
The authorities have now arrested one leader of OneCoin, but the main leader Dr Ruja Ignatova has still not been found. Her brother Konstantin Ignatova was arrested on a wire fraud conspiracy charge and Ruja Ignatova is currently at large. In The Missing Cryptoqueen, Jamie Bartlett investigates the woman behind OneCoin, a scheme which managed to persuade investors around the world to part with as much as £4bn ($4.9bn)
OneCoin, a Bulgaria-based company, was founded in 2014 and still has operations running today, according to the indictment.
The company gave users a commission if they could convince others to buy OneCoin cryptocurrency, taking the familiar shape of a multi-level marketing scheme. It claimed to have over 3 million members worldwide, despite having no functional blockchain or public ledger.
Manhattan attorney Geoffrey Berman says in a government press release that the OneCoin leaders created a multibillion-dollar company “based completely on lies and deceit.” In a brief period between 2014 and 2016, OneCoin made €3.353 billion (roughly $3.7 billion) in revenue. Prosecutors allege that the leaders lied to investors to inflate the value of a OneCoin from half a euro ($0.56) to almost 30 euros ($33.65) as of January this year. In reality, the leaders of the project emailed each other saying that they planned to “take the money and run and blame someone else for this.”
“These defendants executed an old-school pyramid scheme on a new-school platform,” New York County District Attorney Cyrus Vance said in a statement.
US authorities found in their investigation that OneCoin claimed to have a digital ledger for recording crypto-currency transactions, but there wasn’t a public one that could be verified. In 2015, Ignatova started to give members of her project fake OneCoin tokens to sell, aptly calling them “fake coins.”
When members of OneCoin recently asked Ignatov when they would be able to cash out on their tokens, he allegedly responded, “if you are here to cash out, leave this room now, because you don’t understand what this project is about.”
OneCoin is known to be potentially fraudulent in various countries, including in the UK, Germany, Finland, India, China, and Bulgaria. Many authorities have warned about its behaviors and even attempted to halt the company’s operations.
Mark Scott, another person who assisted in the OneCoin project, was indicted last summer and faces a maximum of 20 years in prison. Ignatov also faces 20 years in prison, while Ignatova faces five separate charges, which could add to up a maximum of 85 years in prison if she’s found guilty on all counts.
The investigation by the team behind the podcast has uncovered just how successful OneCoin had been in spreading its message around the world. Internal documents reveal that people in 175 countries invested, with much of the money coming in a six-month period in 2016 when Dr Ruja was on a global tour, including a Wembley appearance.
In the UK, £26m was invested in that period, and the podcast team reckons that the total coming from British investors may have been as high as £96m.
But the documents show that €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.
Earlier this year in the United States, Dr Ignatova was charged in absentia with money laundering, with the Department of Justice calling OneCoin an old-fashioned pyramid scheme.
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