The Biggest (and Wildest) Crypto Scam

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Have you heard of OneCoin? No? Well, that’s not what the developers would have told you in 2014 when they said that OneCoin would dethrone Bitcoin.

With an estimated $4 billion racked up in a Ponzi Scheme-esque fraud, OneCoin is debatably the biggest cryptocurrency scam yet. Let's dig in.

Here's the story.

OneCoin was run by Ruja Ignatova, a woman who was—and still is— called the “Cryptoqueen.” Allegedly, Ignatova raked in over 500 million dollars by promising investors that OneCoin would become the next big thing. However, that "big thing" ended up being nothing but a big fraud.

Anyone who lived through the Bernie Madoff years knows how a Ponzi scheme works: the scam is structured so that there is a small group of schemers at the top of the investing food chain that reap all the returns. The scammers aggressively bring in new investors, and the funds from those new investors is repackaged, and given to earlier investors as their "return on investment." Of course, it's not actually a ROI— it's simply the life savings of someone roped into the same scam.

This is exactly how OneCoin was structured. According to reports, OneCoin didn’t even have proper blockchain technology set-up. The “blockchain” technology was apparently just information stored in a spreadsheet, which is not the ultra-private, high-tech, network-connected-and-verified blockchain technology crypto stans know and love.

Here’s where it gets juicy: OneCoin’s downfall started when Ignatova suspected her boyfriend was up to something. She hired someone to—get this— rent the apartment underneath her boyfriend's apartment and spy on him. Her DIY spy even drilled holes through the ceiling so she could more effectively eavesdrop.

In an even wilder turn of events, Ignatova did discover something: that her boyfriend was working with the FBI! Isn’t that cuckoo bananas? It’s simultaneously both what you hope would happen and wished wouldn’t happen. You hate to see when someone invades someone else’s privacy and it actually works in their favor. It would be better if she had just learned her lesson, and discovered that her boyfriend was just calling his mom every night and talking about how much he loved his bae. But, alas, he was hiding something... and she found it.

Can I just say: this story is ripe for some sort of Lifetime movie; except, you probably wouldn’t believe it when you saw it (even on Lifetime).

The jig was finally up in 2017 when the FBI raided a OneCoin sales pitch in Dubai, which ended in eighteen arrests. Here’s the kicker: the Cryptoqueen? She escaped! To this day, she is still a wanted woman— a FBI most-wanted woman, in fact.

What did we learn?

Don’t let the hype around crypto translate into your portfolio. Even though the crypto world moves fast, you should do your due diligence to make sure that what you think is an up-and-coming cryptocurrency, isn’t a scam.

Here are two things to check that your crypto isn’t a catfish:

1. There is a website. For Bitcoin, it’s: https://bitcoin.org/ for Ethereum, it’s https://ethereum.org/en/ . If your cryptocurrency doesn’t have a legit-looking website, swipe left.

2. Reputable cryptocurrencies publish whitepapers that detail how their technology works. If the currency you’re looking at doesn’t have a whitepaper, or give any description of how their technology works, it’s possible that their “blockchain” is the same technology as OneCoin’s… aka, Google Sheets.

xo,

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