Overview of OneCoin
Let me tell you about OneCoin, which I founded in 2014 under Ruja Ignatova's leadership—it claimed to be a legitimate cryptocurrency but was really an elaborate Ponzi scheme that tricked investors out of $4 billion before collapsing. Without a real blockchain, it operated as a scam, and while it pretended to offer educational courses, those were just plagiarized materials tied to a multi-level marketing trap. The fallout was massive: Ignatova disappeared, co-founder Sebastian Greenwood ended up in jail, and countless investors were left holding the bag.
OneCoin functioned as a cryptocurrency-based Ponzi scheme that pulled in $4 billion from 2014 to 2016. Ignatova vanished in 2017, Greenwood got 20 years in prison, and the whole thing lacked any blockchain or real payment system. It relied heavily on selling those plagiarized educational materials via multi-level marketing, and despite its claims, OneCoin was never traded or usable for transactions.
How the OneCoin Scheme Operated
Ruja Ignatova launched OneCoin in 2014, asserting it worked like any other cryptocurrency, with mining of up to 120 billion coins and an e-wallet for payments—but in reality, there was no blockchain or payment system to back it up. The main operation involved selling educational materials, such as courses on cryptocurrency, trading, and investing, all wrapped in a multi-level marketing setup where you got rewards for recruiting others.
When you bought these course packages, you were supposed to receive tokens for mining OneCoins, but much of the material was plagiarized. This structure kept the scheme going by drawing in more participants through promises that never materialized.
Inside the OneCoin Exchange: xcoinx
The internal exchange, xcoinx, was where members could supposedly convert OneCoin into other currencies, but access required buying more than the beginner package. Selling limits depended on your education package level, and by January 2017, the exchange shut down after denying most withdrawal requests. This was the only way affiliates could cash out, leaving many stuck.
Investigations and Legal Actions Against OneCoin
By 2016, investigations ramped up as countries questioned OneCoin, with Norway's Direct Selling Association labeling it a pyramid scheme in March, followed by warnings from the Hungarian Central Bank in May. In 2017, OneCoin falsely claimed a license from the Vietnamese government to operate as a digital currency, which Vietnam quickly denied.
Early 2018 saw Bulgarian police raid the company's office, after Ignatova disappeared in 2017 amid an arrest warrant. Her brother Konstantin Ignatov took over, but Greenwood was arrested in 2018 and Konstantin in 2019. Konstantin pleaded guilty to fraud and money laundering, Greenwood got 20 years, and remember, OneCoin was never traded or usable for purchases.
Has Ruja Ignatova Ever Been Found?
Ruja Ignatova, the Bulgarian founder known as the Cryptoqueen, hasn't resurfaced since hiding in 2017. She's still missing, and authorities continue to search for her.
What Are the Biggest Crypto Ponzi Schemes?
Beyond OneCoin, the largest crypto Ponzi scheme, others include Bitconnect, exposed in 2018 with $3.5 billion in losses; PlusToken, shut down in 2019 after scamming over $3 billion; GainBitcoin in India, which took over $300 million; and Mining Max, closed in 2021 after defrauding $250 million. These cases show how widespread these frauds can be.
How Much Is One Bitcoin Worth?
Bitcoin's price fluctuates, but as of September 2023, it was trading at $26,551, having ranged from about $26,000 to $67,500 over the previous 12 months from June 2021.
The Bottom Line
OneCoin, started by Ruja Ignatova, turned out to be a $4 billion Ponzi scheme pretending to be a cryptocurrency business. It sold educational materials through multi-level marketing while falsely offering mining and trading, but with no real blockchain or exchange, it all fell apart. Ignatova is still missing, Greenwood is imprisoned, and other leaders faced justice. As an investor, you need to be cautious and do your due diligence to steer clear of these scams.
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