OneCoin was a fraudulent cryptocurrency scheme that operated from 2014 to 2017, defrauding approximately 3.5 million investors across 175 countries of an estimated $4 billion. The scheme was founded by Bulgarian-German entrepreneur Ruja Ignatova and British marketer Karl Sebastian Greenwood, who marketed OneCoin as a "Bitcoin killer" despite the platform lacking any actual blockchain technology.
Overview
OneCoin operated as a hybrid Ponzi and pyramid scheme through its offshore entities OneCoin Ltd (Bulgaria/Dubai) and OneLife Network Ltd (Belize). The scheme sold "educational packages" ranging from €100 to €118,000, which purportedly included cryptocurrency tokens. However, the educational content was largely plagiarized from free sources including Wikipedia, and the tokens held no genuine value.
Unlike legitimate cryptocurrencies that operate on decentralized public blockchains, OneCoin maintained a private database controlled entirely by the company. The platform had no actual mining process—the company simply allocated coins to members, including what internal documents referred to as "fake coins" that didn't exist even in OneCoin's claimed private blockchain. By March 2015, founders were already distributing these non-existent coins to maintain the illusion of growth.
Structure and Operations
OneCoin employed multi-level marketing tactics, incentivizing members to recruit new investors in exchange for commissions. The company determined OneCoin's value internally rather than through market forces, and transactions could only occur on OneCoin's own exchange (xcoinx), which was repeatedly shut down or restricted to prevent withdrawals.
The scheme attracted investors through massive promotional events, including a June 2016 gathering at London's Wembley Arena attended by over 5,000 people. Ignatova, known as the "Cryptoqueen," leveraged her Oxford law degree and claimed McKinsey & Company experience to establish credibility. The operation targeted emerging markets in Asia, Africa, and Eastern Europe, with approximately $500 million coming from China alone.
Collapse and Legal Action
On October 12, 2017, U.S. prosecutors charged Ignatova with wire fraud, money laundering, and securities fraud. On October 25, 2017, Ignatova boarded a Ryanair flight from Sofia to Athens and disappeared, allegedly after being tipped off about the investigation. She has not been seen since.
Co-founder Sebastian Greenwood was arrested in Thailand in July 2018 and extradited to the United States. In September 2023, he was sentenced to 20 years in prison and ordered to forfeit approximately $300 million. Ignatova's brother, Konstantin Ignatov, was arrested in March 2019 and pleaded guilty as part of a cooperation agreement. OneCoin lawyer Mark Scott was convicted in November 2019 of laundering over $400 million through offshore accounts.
In June 2022, the FBI added Ignatova to its Ten Most Wanted Fugitives list, offering a reward that has since increased to $5 million for information leading to her arrest. She is only the eleventh woman to appear on this list since its creation in 1950. Bulgarian investigative journalists reported in 2023 that a police informant claimed Ignatova was murdered in November 2018 by Bulgarian organized crime figures, though the FBI continues to operate under the assumption she is alive.
Impact and Regulatory Response
The OneCoin scheme prompted regulatory warnings from dozens of countries. Bulgaria's Financial Supervision Commission issued warnings in September 2015, causing OneCoin to cease Bulgarian operations and move banking operations abroad. Italy banned OneCoin activities in February 2017, describing it as an illegal pyramid scheme. Similar actions followed in countries including Hungary, Croatia, India, China, and Vietnam.
The scheme had particularly severe impacts on vulnerable communities, including British South Asian Muslims who were targeted after OneCoin obtained a fraudulent Shariah-compliance certificate. Individual losses ranged from modest savings to life-altering sums, with some victims selling livestock or taking loans to invest. Many victims faced not only financial devastation but also shame and broken relationships within their communities.
The OneCoin case significantly impacted cryptocurrency regulation, contributing to expanded enforcement actions against unregistered offerings and reinforcing calls for stricter oversight of digital assets. The scheme remains one of the largest financial frauds in history and serves as a prominent example of cryptocurrency-related crime.
References
- U.S. Department of Justice, Southern District of New York (September 12, 2023). "Co-Founder Of Multibillion-Dollar Cryptocurrency Scheme 'OneCoin' Sentenced To 20 Years In Prison"
- Federal Bureau of Investigation (June 30, 2022). "Ruja Ignatova Added to FBI's Ten Most Wanted Fugitives List"
- BBC (November 24, 2019). "The Missing Cryptoqueen" podcast investigation
- The Times. "One of the biggest scams in history"
- Italian Antitrust Authority (AGCM) (December 2016). Interim injunction against OneCoin
- Bureau of Investigative Reporting and Data - BIRD (2023). Report on Ignatova's alleged murder
- CoinMarketCap Academy (October 10, 2022). "The OneCoin Scam: the Dazzling Story of the Biggest Crypto Ponzi in History"
- The Sofia Globe (May 14, 2022). "3.5M victims worldwide of OneCoin"