Dr. Ruja Ignatova may not be a familiar name but among a certain, she’s a superstar. She founded OneCoin, a cryptocurrency (as claimed by the company) that was born to kill Bitcoin and promised to revolutionize the way people see the money. Dr. Ruja traveled all over the world speaking at events about how OneCoin was similar to Bitcoin but bigger and better.
With the support of 3 million people who invested in OneCoin, Dr. Ruja soon rose to fame but it was in late 2017 when she disappeared without a trace.
For a long time, no one had any idea of what happened to her and where did she go.
What was later discovered was a story of greed and deceit and an international scam worth $15 billion.
Before the crypto-boom of 2017, few knew about Bitcoin (cryptocurrency and blockchain). From a few cents, Bitcoin had grown to thousands of dollars per coin. Investors from all over the world wanted a piece of the cake.
“The term “altcoin” refers to any cryptocurrency that has launched since Bitcoin (BTC). In the early days of Bitcoin, developers forked the open-source code to create new currencies. Over time, these Bitcoin alternatives began to diverge further from their progenitor with different supply schedules and privacy features.”
During that time, altcoins were being developed on top of Bitcoin. Few knew about blockchain in technical terms, the underlying technology behind cryptocurrencies. Most of the people looked at it as a ‘get rich quick‘ scheme.
While some of the altcoins created value, most of them were fake. They just had a promising website with the ultimate motto of destroying bitcoin. Their creators wanted to raise money quickly.
One such altcoin that garnered a lot of attention was One Coin.
Founded in 2015 by Dr. Ruja Ignatova, One Coin was claimed to be better than Bitcoin. In one of her many conferences, Dr. Ruja shouted, “In two years, nobody will speak about Bitcoin anymore!”. People perceived her to be intelligent and knowledgeable; which she indeed was, and thus One Coin gained trust.
Let’s crunch some numbers.
Jen McAdam, an investor in One Coin, poured in €10,000 of her own and persuaded her friends to invest €250,000 in total. She was excited to see her €10,000 turning into €100,000 in no time.
Many investors like her invested in One Coin as they didn’t care about anything but the growing numbers on their screen. Within 3 years, One Coin was skyrocketing and as much as €4 Billion was invested from countries all over the world. Some media report says, in reality, it was €15 Billion.
Dr. Ruja Ignatova
To everybody who tells me, did I violate the cryptocurrency philosophy, guys, we are the biggest cryptocurrency community. We decide on the philosophy of cryptocurrency. — Dr. Ruja Ignatova.
Born in Sofia, Bulgaria, Dr. Ruja emigrated to Germany when she was 10. In 2005, she earned a Ph.D. in European private law from the University of Constance. She also claims to have studied at the prestigious Oxford University. In her early career, she worked with the McKinsey group, a reputable and exclusive global consulting firm.
In 2012, she was convicted of fraud in Germany in connection with her father Plamen Ignatov’s acquisition of a company that was later declared bankrupt in doubtful circumstances.
Dr. Ruja believed that government and banks have too much power in terms of controlling the finances. She even blamed the large financial institutions for the economic crisis in 2008, which to some extent, is correct. This rebellious image made people believe in her. She proclaimed that old systems and institutions were outdated and One Coin will be the future.
In 2016, almost 2 years after One Coin was released, Bjorn Bjercke was appointed as the CTO (Chief Technology Officer) of One Coin. However, he was shocked to find out that the so-called cryptocurrency firm has been running for 2 years without blockchain.
In October 2017, Dr. Ruja goes missing. This was the time when One Coin has witnessed investments worth €15 billion. She was supposed to speak at a conference in Lisbon, but she didn’t show up.
Some conspiracy theories suggest that large banks kidnapped or killed her, or she was hiding from them in fear.
After her sudden disappearance, her brother Konstantin Ignatov took over the business. Later in 2019, the FBI arrested him for money laundering and fraud. The case is still pending for decision.
The MLM Angle
One Coin was neither a cryptocurrency nor there was any blockchain technology involved. So how did it generate so much money?
It was a multi-level marketing scheme.
Here is a good post by Lindy on MLMs.
Dr. Ruja designed the business model to use MLM to grow One Coin’s investor base. They sold educational packages that contained tokens that allow anyone to mine One Coin. These educational courses were related to IPO, investing, etc, and would teach anyone to become financially free, but obviously, they were all plagiarized.
People at the top of One Coin’s network would recruit their relatives and friends, and then they would recruit others, and so on. For each investor brought in, a cut of the purchase would go up the ladder. The problem with this sort of marketing is that it creates no value.
Money that was used to make these educational purchases would get converted into One Coin, and later the cryptocurrency could be converted to Euro. However, there was no exchange. One Coin always delayed the release of exchange, and investors started getting worried.
This issue was to be addressed at the conference in Lisbon, but Dr. Ruja never showed up since then.
Some people sold their valuables and assets to invest in One Coin. They didn’t want to lose another opportunity they had lost with Bitcoin. One Coin became a cult. People were so optimistic about it that they wouldn’t listen to anyone’s suggestions and opinions. The charismatic personality of Dr. Ruja made her unquestionable.
Jen McAdam, the investor that we talked about in earlier paragraphs, admits that she refused to believe when Timothy Curry, a Bitcoin enthusiast, and cryptocurrency advocated tried to warn her about One Coin. She came to the point where she shouted at him for interfering with her decisions.
After three months, when McAdam checked all the facts and questioned leaders at One Coin, she realized that she had lost all her money.
It was a scam!