How a fake Bitcoin clone duped millions across globe Dec 2, 2019, 00:40 IST Igor’s goldmine was a cryptocurrency, a Bitcoin clone named OneCoin that had been launched a year earlier by a Bulgarian startup.Before long, Igor was earning €1 million a month from sales of OneCoin.By 2017, he was pulling in €2 million a month.Ruja Ignatova In 2017, Amsterdam-based Igor Alberts was dreaming of overtaking Bill Gates as the richest man in the world.He had made his millions over 30 years in different multi-level marketing schemes, but in May 2015 he found a goldmine — a ‘product’ so lucrative he told his partners to dump whatever else they were selling and push it full-time instead.Igor’s goldmine was a cryptocurrency, a Bitcoin clone named OneCoin that had been launched a year earlier by a Bulgarian startup.
Before long, Igor was earning €1 million a month from sales of OneCoin.By 2017, he was pulling in €2 million a month.
Because OneCoin was doing so well, Igor became an investor himself and started dreaming of the day when he would own 100 million OneCoin worth €100 each…Ballgowns and diamond earrings Ruja Ignatova studied at Oxford University, earned a PhD from Konstanz University in Germany, then — according to her — worked with McKinsey and Company, and in 2014, aged 34, started OneCoin.
She also styled herself ‘Cryptoqueen’.Not listed on her CV was her knack for making people eat out of her hands.Each time she took the stage wearing her signature ballgowns, diamond earrings and dark red lipstick, Ruja left partners and investors mesmerised.Igor became a convert at a OneCoin event in Dubai.“In two years, nobody will speak about Bitcoin anymore,” she declared at London’s Wembley Arena in June 2016.People around the world took the bait.
Cryptocurrency — especially Bitcoin — was the new gold rush.Small investors wanted in on it hoping that if they bought cheap, skyrocketing values would make them rich in a few years.Even farmers in Uganda tried to buy a slice of OneCoin by selling livestock and taking loans.Investment packages started at €140 and went up to €118,000.
In all, €4 billion-15 billion was invested in OneCoin between August 2014 and March 2017.Ponzi scheme What investors didn’t know was that Ruja was operating a massive con.OneCoin was not a cryptocurrency.A true cryptocurrency, such as Bitcoin, is based on a blockchain record of transactions that cannot be tampered with, to prevent hacking and fraud.
Every Bitcoin buyer has a copy of the Bitcoin blockchain but none can make changes in it.OneCoin didn’t have a blockchain.Glasgow-based Jen McAdam had bought OneCoin worth €10,000 and she saw its value grow 10-fold in just a few months.She had started making shopping and travel plans for the day when OneCoin would launch its exchange to convert cryptocurrency into cash.But the launch kept getting pushed back.Finally, investors were promised a decision during a gathering of OneCoin promoters in Lisbon, in October 2017.
That was the day Ruja disappeared.She didn’t show up for the meeting.FBI’s trail went cold on October 25, when she took a cheap flight from Sofia to Athens.Some investors, like Jen, woke up belatedly to the fact that their OneCoin investments were junk.The rising valuations they had built their dreams on “were just numbers typed into a computer by a OneCoin employee”.But many others are still in denial.
They believe their investments will bear fruit if they wait just a bit longer.Shockingly, the OneCoin scam continues.BBC reports: “Until this week (November 24), the OneCoin head office remained open for business — and people were continuing to promote the currency.” Because it was a multinational operation, local investigators everywhere gave up after running into limits of jurisdiction.As for Ruja, nobody’s sure what became of her.
Was she just a front for an elaborate scam, has she been killed? By some accounts, she was seen at expensive Athens restaurants early this year.She is also said to have undergone plastic surgery, and settled in Frankfurt , where her daughter lives.“The b***h of Wall Street,” as Ruja called herself, has become a phantom.(Adapted from the BBC report, “Cryptoqueen: How this woman scammed the world, then vanished”).
