Jan 2017 - OneCoin Scheme Collapses - $4b (Global)
"OneCoin [was] promoted as a cryptocurrency by Bulgaria-based[ offshore companies OneCoin Ltd (registered in Dubai) and OneLife Network Ltd (registered in Belize), both founded by Ruja Ignatova in concert with Sebastian Greenwood." "Ruja Ignatova started OneCoin in 2014, claiming it worked just like any other cryptocurrency. The claim was that OneCoins could be mined (with 120 billion coins available) and used to make payments, even having an e-wallet. However, there was no OneCoin blockchain model or payment system."
"The company did sell educational materials, such as courses on cryptocurrencies. This was considered its main business. The courses included other areas as well, such as trading and investing." "Much of the course material offered was said to be plagiarized." "The courses were part of a multi-level marketing (MLM) scheme, where buyers were offered rewards for bringing in more participants."
"The exchange for converting OneCoin into other currencies was the OneCoin Exchange xcoinx, which was an internal marketplace. Members were able to access the exchange if they bought more than just the beginner package."
"On 1 March 2016, without notice, OneCoin issued an internal notice that the market would be closed for two weeks for maintenance, explaining that this was necessary due to the high number of miners and for "better integration with blockchain". On 15 March 2016, the market opened again but no visible changes had been made; most of the transactions expired as before and daily limits stayed on."
"Selling limits were placed on the accounts based on the level of education package purchased. In January 2017, the exchange was shut down. Leading up to the shutdown, OneCoin denied the majority of withdrawal requests. The exchange was the only way for affiliates to cash out."
“The only way to become part of the IPO. You will be able to exchange these OneCoins over the next month into so-called OFCs. An OFC is a future certificate that entitles you to receive shares in the company OneCoin that will be listed on the stock exchange.”
"OneCoin was a cryptocurrency-based Ponzi scheme. The companies behind the scheme was OneCoin Ltd. and OneLife Network Ltd., founded by Bulgarian national Ruja Ignatova, who disappeared in 2017. However, not before the scheme raised $4 billion."
"OneCoin is to blame for the loss of over $30 million in invested funds, making it one of the most widespread cryptocurrencies that were proven to be scams. Unfortunately, the fake cryptocurrency is hard to pin down, as it has made splashes in Vietnam, China, India, Bulgaria, and Italy (just to name a few), without actually being licensed in any of them. Until OneCoin is completely dismantled, many nations are on high alert for signs of the fraudulent organization."
"OneCoin is a sophisticated multi-layered Ponzi scheme. The company was busted in India and some of the European countries. People have spent millions on ICO despite the fact that OneCoin doesn’t even have a public ledger and official license. What makes this ICO one of the top-level scams is that after 2.5 million euro fine in Italy and $30 million fine in China this company keeps existing. If you want to know it, they didn’t develop anything new since the times when their crimes were revealed."
Further Analysis
Onecoin ran a large Ponzi scheme, which successfully tricked investors to invest over $4b. There was no blockchain behind the token, and the only way to exchange it to cash was through an exchange which shut down in January 2017. The founder is still at large.
How Could This Have Been Prevented?
More Cryptocurrency Exchange Hacks/Scams/Frauds
MyEtherWallet Unauthorized Transaction boki019 > > < < Bitcurex Exchange Hack
Sources/Further Reading
https://www.bbc.com/news/stories-50435014 (Dec 12)
Cryptocurrencies That Were Proven to Be Scams | The Chain (Jan 16)
https://medium.com/@ducktator/ico-scams-hall-of-fame-dc915f1189af (Jan 17)
OneCoin (Jan 17)
OneCoin - Wikipedia (Jan 17)
Blueprint to a Digital Scam: OneCoin Prepares to 'Go Public' (Jan 17)
OneCoin crypto-scam lawyer found guilty of worldwide $400m fraud – Naked Security (Jan 17)
Ruja Ignatova - Wikipedia (Jan 17)
https://www.bbc.com/news/technology-53721017 (Jan 21)
Bloomberg - Are you a robot? (Jan 21)
!! WARNING !! ONECOIN “BIGGEST CRYPTO SCAM” RUN BY MISSING CRYPTO QUEEN - TRT World (Jan 21)
What We Can Learn From OneCoin, Crypto's Biggest Scam (Jan 21)
Seychelles Police Asked to Probe Transfer of 230K Bitcoin Linked to OneCoin Scam (Jan 21)
$4B Ponzi Scheme OneCoin and ‘CryptoQueen’ Leader Found in Default in US Lawsuit - CoinDesk (Jan 21)
OneCoin Investors Allege BNY Mellon Aided $4B Fraud - CoinDesk (Jan 21)
OneCoin Took In Billions. Then Its Leader Vanished. - WSJ (Jan 21)
OneCoin News by Cointelegraph (Jan 21)
$4B Ponzi Scheme OneCoin and ‘CryptoQueen’ Leader Found in Default in US Lawsuit (Jan 21)
In $4 billion OneCoin fraud, jurisdiction dooms claims against ex-Big Law partner | Reuters (Jan 21)
https://filmdaily.co/wp-content/uploads/2020/09/onecoinceo-lede-1300x861.jpg (Jan 21)
The OneCoin Ponzi wall of shame (Jan 21)
https://www.bbc.com/news/technology-49826161 (Jan 24)
Worldwide crypto & NFT rug pulls and scams tracker - Comparitech (Dec 31)
2019 In Review: Major Blockchain/Crypto Security Incidents | MyCrypto Blog (Dec 31)
BBC Radio 5 Live - The Missing Cryptoqueen - Downloads (Dec 31)
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