The suspicious disappearance of Dr. Ruja Ignatova, the “Crypto Queen,” on her way to a promotional event in Lisbon left investors and OneCoin’s management alarmed and restless. The whispers that ‘Ruja has been kidnapped by the rivals’ soon turned into loud cries that ‘we have been scammed. Now, for those who aren’t familiar, let us address the question — who is Ruja Ignatova, and what did she do?

In June 2016, a crowd flooded the Wembley Arena in London to listen to a 36-year-old businesswoman claim that OneCoin was on the path to becoming the world’s biggest cryptocurrency “for everyone to make payments everywhere“. Dr. Ruja Ignotova is a Bulgarian entrepreneur, the creator and the face of “OneCoin” — a cryptocurrency that intended to change the world. OneCoin was often advertised as ‘the Bitcoin Killer’ which turned out to be one of the biggest pyramid scams of the decade.

Ruja, born in Sofia in 1980, is described by those who knew her as an extremely intelligent and decisive woman, able to present her ideas and beliefs in a convincing and witty way. She studied at Oxford and started her career working for McKinsey and Company, one of the world’s leading management consulting firms. In 2012, a metallurgical complex in Bavaria, which Ruja had bought together with her father Plamen Ignatov, declared bankruptcy under suspicious circumstances. The judiciary intervenes and sentences her to fourteen months of probation for fraud, while a trustee of the group accused her of having stolen at least one million euros from the company.

In 2013, Ruja along with a Swede, Sebastian Karl Greenwood entered the promising sector of cryptocurrencies with the launch of ‘BigCoin’, which did not last long. In 2014, ‘OneCoin’ was launched and promoted as a cryptocurrency by Bulgaria-based offshore companies, including OneCoin Ltd (registered in Dubai) and OneLife Network Ltd (registered in Belize), both founded by Ruja Ignatova in concert with Sebastian Greenwood. OneCoin was presented as an innovative ultra-fast cryptocurrency based on the world’s first private blockchain designed to improve the lives of investors and make everyone rich.

OneCoin had its ecosystem where the users buy courses from OneCoin on financial literacy and trade OneCoin. There were seven such packages in total — they differ in quantity and quality of training material. The first package of instructions was free of charge, the second one costing €110, and the seventh one at €55,555. For the purchase of these packages, people received tokens, which are subsequently used for ONE mining. The “harder” the training course, the more tokens users receive. Both tokens and ONE coin were credited to the user’s OneCoin personal account.

One of the ecosystem projects was the OneLife intranet. This was a multi-level marketing scheme, which is based on attracting new members. The partnership program consisted of 8 types of bonuses, and this was the main feature of the whole system. The OneLife network offered a generous referral reward — up to 10% of the amount of investment by the referee (6% was paid in regular currency, the remaining 4% in ONE coin). In addition to referral rewards, participants received multi-level bonuses in “depth” (interest in attracting friends and their friends), bonuses for the turnover of the entire structure, and other “sweets”. Leading leaders could become trusted persons of other participants and manage their accounts. In 2016, the Direct Selling Association in Norway and the Hungarian Central Bank warned against OneCoin, comparing it to a pyramid scheme. In the same year, several members and investors of OneCoin were arrested, and US$30.8 million worth of assets were seized in China.

According to the idea of the project, ONE coin was minted on the company servers, and any member of the network could become a validator. The more internal tokens one had, the more they mined. On top of that, the price of ONE was constantly growing: at the start of 2015, one coin was worth €0.50, and almost 5 years later — €30. The price increase is supposedly due to the constant increase in the number of participants and, consequently, the increasing demand for tokens. One could always buy them to accumulate even more, but they could not be exchanged for money.

The only way to exchange Onecoins for any other currency was OneCoin Exchange, xcoinx, an internal marketplace for members who had invested more than just a starter package. Onecoin could be exchanged for euros, which were placed in a virtual wallet from which they could request a wire transfer. The marketplace had daily selling limits based on which packages the seller had invested in, greatly limiting the number of onecoin that could be exchanged.

On March 1, 2016, without notice, OneCoin issued an internal notice that the market would be closed for two weeks for maintenance, explaining that this was necessary due to the high number of miners and for “better integration with blockchain“. On March 15, 2016, the market opened again, but no visible changes had been made; most of the transactions expired as before, and daily limits stayed on. The exchange was shut down without notice in January 2017, though individuals affiliated with the scheme continue to accept funds.

All participants had “unique opportunities”. Coins could be obtained not only by buying courses and attracting newcomers but also in other ways. For example, by donating money to the internal charity platform – OneWorld Foundation, buying local cloud storage, or even a tablet from the company. Of particular note was the Dealshakers platform, which replaced the internal exchange. This was a kind of local Amazon, where users could buy and sell various goods for ONE. However, most deals required users to pay for the goods partially in ONE, and the rest in euros.  That is, if you want to buy a TV, you will have to spend both ONE tokens as well as euros.

The project was aimed at a wide audience, the majority being people who did not know much about cryptocurrencies. Most investors have never used digital money before; they have only heard about it, about its mining, and what it can help them earn. But they didn’t understand how. And no wonder — even now, the majority of the population does not understand cryptocurrencies. Back in 2015, there were a lot more people who didn’t have a clue about cryptocurrencies, and Onecoin was not decentralized like most crypto assets but rather hosted on OneCoin Ltd’s servers.

OneCoin disguised as ‘Cryptocurrency of the future’ managed to raise about $5 Billion from investors from 175 countries. Right when OneCoin seemed to be gaining momentum, Bulgaria’s Financial Supervision Commission (FSC) issued a warning of potential risks in new cryptocurrencies, citing OneCoin as an example. After the warning, OneCoin ceased all activity in Bulgaria and started using banks in foreign countries to handle wire transfers from participants. In February 2016, the British newspaper Daily Mirror wrote that OneCoin / OneLife is a get-rich-quick scheme scam and a cult, calling it “virtually worthless”.

As the weeks and months went by, it started to become clear that OneCoin is just another Ponzi scheme behind the facade of cryptocurrency, or, as in the words of New York County District Attorney Cyrus R. Vance Jr., “An old school pyramid scheme on a new school platform.” Further, FBI Assistant Director-in-Charge William Sweeney Jr., in a press release by the Department of Justice, said:  “As we allege, 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.  Whether you’re dealing with virtual currency or cold, hard cash, we urge the public to exercise due diligence with any investment.”

While the authorities of various countries began investigating the scam, Dr Ruja Ignotova managed to disappear when she was expected to attend one of many promotional events in Lisbon. In the meantime, Ruja’s brother, Konstantin took over operations of OneCoin awaiting her return. Between February 27, 2019, and March 6, 2019, Konstantin travelled to the United States to conduct OneCoin-related business, including in Las Vegas. Later, arrested at Los Angeles Airport and charged by complaint with one count of conspiracy to commit wire fraud, which carries a maximum sentence of 20 years in prison. On top of that, the founder of the project, Ruja Ignatova, who disappeared in 2017, is wanted internationally. She faces up to 25 years in prison for money laundering, securities fraud, and organization of a Ponzi scheme. The investors who had invested their hard-earned money still await the decision of the courts to recover their money from the assets of Dr. Ruja Ignotava and others.