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What is the OneCoin scam promoted by Cryptoqueen Ruja Ignatova?

What is the OneCoin scam promoted by Cryptoqueen Ruja Ignatova?

OneCoin was a Ponzi scheme that was being promoted as a cryptocurrency

According to US prosecutors, the global revenue from the scheme was almost $4 billion. According to US prosecutors, the global revenue from the scheme was almost $4 billion.

The FBI recently added Ruja Ignatova, dubbed the "Cryptoqueen," to its top ten most wanted list and it has bought the OneCoin scam back in the news again. Here are the details about the scam you might have missed out:

What is OneCoin?

OneCoin was a Ponzi scheme that was being promoted as a cryptocurrency by companies with offices in Bulgaria called OneCoin Ltd (registered in Dubai) and OneLife Network Ltd (registered in Belize).

According to US prosecutors, the global revenue from the scheme was almost $4 billion. While prosecuting 98 individuals, Chinese law enforcement recovered 1.7 billion yuan (US$267.5 million). 

Who were behind the OneCoin scam?

The OneCoin scam was promoted by Ruja Ignatova and Sebastian Greenwood. Ruja Ignatova vanished in 2017, just before her brother Konstantin Ignatov took over and a covert US arrest order was issued for her. Ruja Ignatova hasn't been apprehended but was added to the FBI's most-wanted list recently. Greenwood was detained in 2018, while Konstantin Ignatov was detained in March 2019. Konstantin Ignatov admitted guilt to accusations of fraud and money laundering in November 2019. The charges carry a 90-year prison sentence as their ultimate possible punishment.

How did the OneCoin scam work?

Late 2014 saw the debut of OneCoin.

It was a centralised currency maintained on OneCoin Ltd's computers rather than a decentralised coin.

OneCoin claimed that its primary line of business was the exchanging of educational materials.

Members can purchase instructional packages for between 100 and 118,000 euros, or in the case of one industry blog, up to 225,500 euros.

Each shipment comes with "tokens" that may be used to "mine" OneCoins.

They reportedly claimed that servers at two locations in Bulgaria and one location in Hong Kong mine OneCoin.

Each level or package (except from levels six and seven) provides fresh educational content that has been lifted verbatim from various sources.

But at a normal OneCoin hiring meeting, recruiters largely discuss bitcoin investing, and the instructional material is seldom ever brought up.

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

OneCoin abruptly announced on March 1, 2016, that the market would be halted for two weeks for maintenance, citing a large number of miners and the need for "improved interaction with blockchain." The market reopened on March 15, 2016, with no discernible modifications; the majority of transactions expired as before, and daily limitations remained in place.

In January 2017, the exchange was abruptly closed down and the issue came in the purview of regulators worldwide.

Published on: Jul 03, 2022, 10:57 AM IST
Posted by: Vivek Dubey, Jul 03, 2022, 10:49 AM IST