Ruja Ignatova: From Cryptoqueen to FBI’s Most Wanted
When it comes to crypto scams and rug pulls, most perpetrators get off scot-free. But authorities are looking to change that. The FBI just added self-proclaimed Cryptoqueen and creator of OneCoin Ruja Ignatova to its 10 most-wanted list. And it’s offering a sizable reward for any help it can get.
To be fair, most-wanted lists aren’t our usual beat here at Investment U. But we think a quick history lesson about Ruja Ignatova and the Ponzi scheme she set up with OneCoin is a worthwhile teachable moment.
So without further ado, here’s a brief history of the Cryptoqueen that went from near ubiquity to invisible… And what we can learn from it.
Back in 2014, cryptocurrency wasn’t understood very well. For the most part, it was something that programmers and those working in tech fields might have had a basic understanding of. But not many others did. However, what folks were starting to see was this stuff was making some people rich. And that spelled opportunity… On both sides of the law. Here’s how Ruja Ignatova pulled off one of the biggest scams of all time.
Dr. Ruja Ignatova’s Killer Token
At the time, the internet wasn’t rife with tools to check trading volume. And those that knew how to access ledgers on the blockchain were mostly specialists. So when a doctorate from the University of Constance told folks that OneCoin was going to be the Bitcoin killer, they took her at her word.
She quickly drummed up enough of a reputation that potential investors were willing to spend up to 225,500 euros for educational materials from the Cryptoqueen’s company. These resources included tokens that could then be assigned to “mine” OneCoins. And the only way to exchange said OneCoins was on the OneCoin exchange.
From there, OneCoins could be exchanged for euros. These euros were placed in a digital wallet. But to cash out officially, a request for a wire transfer had to be made. And naturally, there were limits as to how many OneCoin’s could be sold.
These days, these circumstances would all be major red flags. And some picked up on that. Ruja Ignatova’s home country of Bulgaria issued warnings about the risks involved in trading cryptocurrency. And it cited OneCoin as a prime example of a risky one. Ignatova didn’t take too kindly to the messaging. So the Cryptoqueen moved all of her business’ activity out of Bulgaria.
But the warning was one that other countries took note of. Scandinavian authorities also began keeping an eye on OneCoin’s operation. The Direct Selling Association in Norway compared it to a pyramid scheme. But not everyone was in agreeance. Ruja Ignatova still had a sizable following. And the promise of riches overwhelmed many investors’ better judgement.
Where Things Got Really Fishy…
Money – whether paper or digital – isn’t intrinsically valuable. It’s only worth what we all agree upon. Even for that to work, businesses, individuals and governments all need some degree of trust for it to work. This is where the beauty of cryptocurrency lays. A good one is completely decentralized. It’s autonomous and can’t be tampered with. And its supply can’t be manipulated.
OneCoin, on the other hand, wasn’t decentralized. It was hosted on OneCoin servers. And it was absolutely manipulatable. By the middle of 2017, more and more organizations were becoming wise to what Ruja Ignatova was up to. Some governments issued cease and desist orders to OneCoin. Authorities deemed OneCoin to be fraudulent “own funds” trading. And then it was also noted that a lot of the company’s resources were actually plagiarized.
That was about as good as news would get for the Cryptoqueen. In 2018, OneCoin servers were seized by German police and Europol. By the end of 2019, Ruja Ignatova’s brother pled guilty to fraud and money laundering connected to OneCoin. However the Cryptoqueen herself has vanished. And she did so after having defrauded investors out of an estimated $4 billion.
Where in the World Is Ruja Ignatova?
Needless to say, not many people know where Ruja Ignatova is these days. Her last known whereabouts were when she boarded a plane heading to Greece. There are allegations that she’s living in Germany under a fake identity. She also could have undergone surgery to change her appearance. Any of us could have passed by her on the street and been none-the-wiser.
But none of that really matters. In the end, she made off with a lot of folks’ money. And the crazy part is this isn’t even the first time. She was convicted of fraud in 2012. And she was in another multi-level marketing scam called BigCoin – which is where she likely got the idea for OneCoin. The Cryptoqueen just fine tuned things a bit more.
The important takeaway here though is this should serve as a warning. Ruja Ignatova set the blueprint for what a crypto scam looks like. She struck at exactly the right time… And was able to maximize the amount of money she fleeced from investors. But this was far from the most recent scam we’ve seen like this. It just happens to be the biggest. Which is why she earned a spot on the FBI’s most-wanted list.
In 2021, an estimated $1 billion was lost in crypto scams. Those reported losses are up nearly sixty times what they were in 2018. So while crypto has penetrated the mainstream more than ever, so have the scams. Remember this the next time you read about the next moonshot that’s gonna make everyone rich.
Before investing, always try to find out as much as you can about the people operating a new venture. Investigate the liquidity of a new token. If sells are limited, that should be a warning. And lastly, if it sounds too good to be true… well, you know. At least now you do.
About Matthew Makowski
Matthew Makowski is a senior research analyst and writer at Investment U. He has been studying and writing about the markets for 20 years. Equally comfortable identifying value stocks as he is discounts in the crypto markets, Matthew began mining Bitcoin in 2011 and has since honed his focus on the cryptocurrency markets as a whole. He is a graduate of Rutgers University and lives in Colorado with his dogs Dorito and Pretzel.