What Is OneCoin?
OneCoin was a cryptocurrency-based Ponzi scheme. The companies behind the scheme were OneCoin Ltd. and OneLife Network Ltd., founded by Bulgarian national Ruja Ignatova, who disappeared in 2017. However, not before the scheme raised $4 billion.
- OneCoin was a Ponzi scheme that pulled in $4 billion from 2014 to 2016.
- OneCoin was not actively traded, nor could the coins be used to purchase anything.
- Its founder, Ruja Ignatova, has disappeared and co-founder Sebastian Greenwood is in jail in the U.S.
- The company’s main business was selling course materials, which were reportedly plagiarized in most cases.
- Its course material business model was akin to a multi-level marketing (MLM) scheme, where course material buyers were paid to recruit new buyers.
Ruja Ignatova started OneCoin in 2014, claiming it worked just like any other cryptocurrency. The claim was that OneCoins could be mined (with 120 billion coins available) and used to make payments, even having an e-wallet. However, there was no OneCoin blockchain model or payment system.
The company did sell educational materials, such as courses on cryptocurrencies. This was considered its main business. The courses included other areas as well, such as trading and investing. The courses were part of a multi-level marketing (MLM) scheme, where buyers were offered rewards for bringing in more participants.
Buyers of the course packages were to receive tokens that could be used to mine OneCoins. Much of the course material offered was said to be plagiarized.
The exchange for converting OneCoin into other currencies was the OneCoin Exchange xcoinx, which was an internal marketplace. Members were able to access the exchange if they bought more than just the beginner package.
Selling limits were placed on the accounts based on the level of education package purchased. In January 2017, the exchange was shut down. Leading up to the shutdown, OneCoin denied the majority of withdrawal requests. The exchange was the only way for affiliates to cash out.
OneCoin as a Fraud
In 2016, questions started to come up about OneCoin as many countries began to investigate the company, with some calling it a pyramid scheme. The Direct Selling Association in Norway first called the OneCoin fraud a pyramid scheme in March 2016. Later that year (in December 2016), the Hungarian Central Bank warned against OneCoin being a pyramid scheme.
In 2017, OneCoin claimed it was the first company to become licensed by the Vietnamese government and legally allowed to be used as a digital currency. The Vietnam government rebutted the claim.
In early 2018, the Bulgarian police raided the company’s office. Founder Ruja disappeared in 2017 when a warrant was filed for her arrest. Her brother, Konstantin Ignatov, replaced her as the face and manager of the company. Co-founder Greenwood was arrested in 2018 and Konstantin was arrested in November 2019.
Konstantin pleaded guilty to fraud and money laundering. Greenwood is in discussion with authorities about a possible plea deal. OneCoin was never actively traded, nor could the coins be used to purchase anything.
Has Ruja Ignatova Ever Been Found?
Ruja Ignatova, the Bulgarian founder of OneCoin, known as Cryptoqueen, has not resurfaced since going into hiding in 2017.
What Are the Biggest Crypto Ponzi Schemes?
There have been a number of other big Ponzi schemes in addition to OneCoin, the biggest crypto scheme ever. Bitconnect was exposed in 2018, ultimately crashing and causing its investors to lose $3.5 billion. PlusToken scammed investors until 2019, when it was closed down, after costing investors over $3 billion. GainBitcoin was an India-based coin that robbed investors of over $300 million before it closed down. Mining Max scammed investors out of $250 million until authorities shut it down in 2021.
How Much Is One Bitcoin Worth?
The price of Bitcoin varies, but as of June 2022, was trading at $27,333. The price has fluctuated between roughly $27,000 and $67,500 over the 12 months between June 2021 and June 2022.