Recap
OneCoin, founded in 2014 by the German citizen Bulgarian-born Ruja Ignatova, emerged as one of the most notorious cryptocurrency schemes in history. Centered primarily in Bulgaria, OneCoin was marketed as a revolutionary cryptocurrency that promised high returns to its investors. However, it quickly became the subject of scrutiny, investigations, and legal actions worldwide due to allegations of being a Ponzi scheme.
Ruja Ignatova, often referred to as the “Crypto Queen,” initially gained significant traction in Bulgaria, her home country. The promotional strategy for OneCoin involved aggressive marketing tactics, including seminars, workshops, and the use of a multi-level marketing (MLM) structure. Many investors were drawn to the promise of substantial financial gains in a nascent digital currency market that seemed to be the future of finance.
The company claimed that OneCoin was a “real” cryptocurrency, suggesting that it would rival Bitcoin. It even established its trading platform, the OneCoin Exchange, which, according to its promoters, would allow users to buy and sell OneCoins. However, there was no independent verification of these claims, leading to rising skepticism among informed investors. Аs the popularity of OneCoin surged, numerous red flags began to appear. Regulators in Bulgaria and other countries started investigating OneCoin. The scheme’s reliance on new investors’ money to pay returns to earlier investors was a classic indicator of a Ponzi scheme. Reports indicated that the actual currency was non-functional and lacked any real market value.
In 2017, the situation escalated when Ruja Ignatova disappeared, leaving thousands of investors in Bulgaria and beyond in financial turmoil. Law enforcement agencies began cracking down on OneCoin operations, leading to arrests of several key figures in the organization. Ruja Ignatova was accused of one of the largest frauds on the planet for $4 billion.
The Bulgarian government took significant steps to curb the OneCoin operation. In 2018, the Bulgarian authorities conducted raids and confiscated documents and assets linked to OneCoin. The Bulgarian Financial Supervision Commission warned investors about the risks associated with OneCoin, labeling it a fraudulent scheme. Despite these actions, many investors remained hopeful, clinging to the belief that OneCoin could still recover and be legitimized. However, as the years passed, the likelihood of recovering lost funds diminished.
Recent Development of OneCoin Saga
After several years of stagnation, the competent authorities around the globe re-started their actions against OneCoin and Ruja Ignatova, the latter still being undetectable and on the list of the 10th most wanted fugitives by the FBI.
On June 26, 2024, during a joint briefing with the US Ambassador to Bulgaria, Kenneth Merten, the Bulgarian Public Prosecutor’s Office announced that Ignatova would be indicted in absentia, which would allow for the necessary steps to be taken to initiate a procedure for the confiscation of her illegally acquired property. At that time, Ambassador Merten indicated that the US was announcing a new reward of up to $5,000,000 for information leading to the arrest or conviction of Ignatova.
The Sofia City Prosecutor’s Office officially announced on August 12, 2024, that Ignatova was indicted in absentia for money laundering in a criminal group. She was ordered to be detained for up to 72 hours, which would be executed upon her identification. The investigation is initiated in connection with materials received from foreign law enforcement agencies. Ignatova is brought in as a defendant for the fact that in the period from 2014 to 2017 on the territory of the Republic of Bulgaria she formed and led an organized criminal group, created with the aim of committing investment fraud under the “Ponzi” type scheme, as well as for personal gain. The Crypto Queen has also been charged with money laundering – for the fact that in the period from 2014 to 2017, under the conditions of an ongoing crime as an instigator and accessory in some cases, and in others as a perpetrator, she carried out numerous property disposal transactions, thus concealing the origin and actual rights to property that she knew was acquired from criminal activity – “Ponzi”-type investment fraud.
Meanwhile on August 7, 2024, the High Court in London, United Kingdom, announced a global freezing order preventing Ignatova’s assets from being sold or moved as part of a class action lawsuit filed by more than 400 investors in OneCoin platform. Until now, attempts by OneCoin investors to obtain significant compensation for their losses have failed. In the UK alone, OneCoin investors have lost over £100m. The freezing order targets also seven other people, i.e. the OneCoin co- founder Sebastian Greenwood, currently serving a 20-year sentence in a US prison for his role in the fraud, and four companies – all alleged to have been connected with OneCoin in some form.
And just in mid-November 2024 it became clear that Ignatova received $50 million as some of her assets were unblocked. Her assets in Europe and the United Arab Emirates should have been frozen, but an August transaction in Dubai worth $50 million opened Pandora’s box. Two persons (the so-called cryptosheikh Salman al-Saud and a man named Maimon Madani) argued about who was the real representative of Ruja Ignatova before the court in Dubai. Both were fighting over money from an account that was frozen in 2015 due to suspicions of financing terrorism and money laundering. Surprisingly, the court gave Madani the 50 million, however questions are raised who the money is for and how the assets are unfrozen. In addition, the fact that up-to-date powers of attorney were presented before the court in Dubai refute the rumour that Ruja Ignatova is no longer alive.
Conclusion
OneCoin stands as a cautionary tale in the cryptocurrency world still waiting for closing. It exemplifies the potential pitfalls of investing in unregulated schemes that promise unrealistic returns. As the cryptocurrency landscape continues to evolve, the lessons learned from the OneCoin saga underscore the necessity for vigilance, thorough research, and regulatory accountability to protect investors and foster a legitimate digital currency environment.
