Self-styled ‘cryptoqueen’ Dr Ruja Ignatova, who allegedly steered one of the world’s biggest cryptocurrency frauds, is now on the Federal Bureau of Investigation’s (FBI) list of its 10 most wanted fugitives. Announcing a reward of up to $100,000 for information leading to the arrest of Ignatova on Thursday, June 30, the probe agency added that she might have had cosmetic surgery to transform her appearance. The German citizen disappeared in 2017 without a trace, a year after operating the biggest scam in the history of crypto in 2016. She disappeared with billions of dollars in Bitcoin, the competitor currency she promised to kill.
Here are the details about Ruja Ignatova and the OneCoin scan which is back in the news again: -
Who Is Ruja Ignatova, FBI's Most Wanted 'Missing Cryptoqueen'?
Before running one of the world’s most notorious cryptocurrency scams, Ruja Ignatova had a brilliant resume, a law degree from Oxford University and a stint with consulting firm McKinsey. Ignatova established OneCoin Ltd in 2014 and started marketing her currency as a “bitcoin killer”. As per the investigators, the ‘cryptoqueen’ made inaccurate representations to get huge amounts of funds from investors, as many of them did not completely understand how to invest in cryptocurrency.
Since she swept people off their feet with her striking presence in ballgowns and diamonds along with a resume boasting of an Oxford education and a stint at McKinsey, many people signed up for OneCoin. This coupled with several glamorous events where Ignatova delivered impressive speeches led to more onboarding of investors who did not know one essential thing, that the company had no blockchain.
OneCoin operated across the globe and had over three million investors from more than a hundred countries. According to the records collected during the probe, between the fourth quarter of 2014 and the third quarter of 2016, the company generated a humongous €3.353 billion in sales revenue and made “profits” worth €2.232 billion. Capitalising on the feverish speculation of the early days of cryptocurrency, Ignatova guaranteed investors huge returns at minimal risk, according to prosecutors. She offered buyers a commission, if they sold OneCoin to more people, in order to draw even more investors into buying her bogus currency.
What Is OneCoin Scam?
Special Agent in Charge John R. Tafur from the US Government tax collection Inland Revenue Service (IRS) named the OneCoin fraud “an old scam with a virtual twist” – which was established with the sole objective of defrauding investors. Any investor looking to exit OneCoin was to “take the money and run and blame someone else,” Ignatova told her co-founder in an e-mail found during the probe.
It was fundamentally a Ponzi scheme from the very beginning, which was fraudulently represented as a cryptocurrency, investigators allege. A Ponzi scheme is a form of a bogus investing scam promising high rates of return on investment with little or no risk to investors. This is similar to a pyramid scheme in which early investors are repaid by bringing in new ones.
Both the schemes eventually bottom out when the flood of new investors dries up, and there isn't enough money to go around. At that point, the scheme unravels and investors lose their money.
How The OneCoin Scam Worked?
The false representations Ignatova and other representatives of OneCoin gave are said to have duped the victims through a series of fraudulent and deceitful statements. They promised that OneCoin crypto was ‘mined’ through mining servers and the currency’s value was founded on market supply and demand, with its value purportedly growing from €0.50 to around €29.95 per coin, as of January 2019.
However, in actuality, OneCoin was not mined at all, and its value was entirely decided internally by Ignatova and her accomplices. OneCoin is also alleged to have a blockchain that is used by other cryptocurrencies. As they were not secured by any technology, the OneCoin tokens were primarily worthless. This is because they could be not actively traded, could not be utilised to purchase anything and investors also had no way of trailing their money.
FBI Special Agent Ronald Shimko said in a statement, as reported by AFP, that OneCoin claimed to have a private blockchain. “This is in contrast to other virtual currencies, which have a decentralized and public blockchain. In this case, investors were just asked to trust OneCoin,” he added. Ignatova also told OneCoin members time and again that an Initial Public Offering (IPO) of the company would happen on several dates between 2018 and 2019, in order to create a buzz and get even more funds from the investors. However, according to the FBI, this IPO was constantly deferred and never took place.
How Did Ruja Ignatova Escape? Where Is She Now?
The self-styled ‘cryptoqueen’ vanished into the thin air in 2017, when the probe agencies from across the globe started looking for her. Ignatova disappeared after bugging her American boyfriend’s apartment as she found out that he was cooperating with an FBI probe into OneCoin. Ignatova boarded a flight from Bulgaria to Greece and has not been seen since. She was last traced to Athens, Greece where she arrived from Sofia, Bulgaria and then fell off the radar.
According to the New York Post, Ignatova speaks English, Bulgarian, and German and might be using a fake passport. She has dark hair and brown eyes, but investigators claim that she might have altered her appearance.
US officials first issued a warrant for her arrest in 2017 wherein the missing ‘cryptoqueen’ has been charged with conspiracy to commit wire scam, money laundering, securities fraud, and connivance to commit securities fraud. The first four charges each carry a sentence of up to 20 years in prison, whereas, the last count is punishable by up to five years in prison, according to The Washington Post.
After Ignatova disappeared in 2017, her brother Konstantin Ignatov took the reins of the company, however, he was apprehended in Los Angeles by the FBI in 2019 for a wire scam. He pleaded guilty to a series of offences and entered into a plea deal to cooperate with US authorities, the publication reported.
Ruja Ignatogva's Dubai Connection
It is also suspected that big players in Eastern European organised crime got involved in the scam. Investigations also reveal Ignatova’s connections to Saudi Arabia. According to a report by BBC, a lawyer representing a OneCoin victim got thousands of documents from a whistleblower who stated that it was wrong that people in Dubai were being “unjustly enriched.”
The “Dubai Files” reveal that a Bitcoin deal was struck with an Emirati royal Sheikh Saoud bin Faisal Al Qassimi. Meanwhile, Sheikh Saoud’s lawyer states that all information connecting Ignatova and his client is “baseless”. However, the evidence reveals both of them once had close ties until their links perhaps soured after Ignatova’s alleged Bitcoin deal.