The popular Cryptoqueen scammed the world of over 4 billion dollars and vanished, her real name is Dr Ruja Ignatova. In 2016, in Wembley she told the world how her OneCoin was on course to become the world’s biggest cryptocurrency that people should start investing in it.
Bitcoin was the first cryptocurrency and is still the biggest and best-known – its rise in value from a few cents to hundreds of dollars per coin by mid-2016 had given rise to a frenzy of excitement among investors. Cryptocurrency as an idea was just entering the mainstream. Lots of people were looking to get involved in this strange new opportunity.
Dr Ruja told the Wembley audience that OneCoin was the “Bitcoin Killer”. “In two years, nobody will speak about Bitcoin anymore!” she shouted. And by March 2017, over 4 billion dollars have been invested in OneCoin. But there was something very important that these investors didn’t know.
To explain this, I need to first explain briefly how a cryptocurrency actually works. This is notoriously difficult – go online and you’ll find hundreds of different descriptions, some of them utterly baffling to the non-specialist. But this is the first principle to grasp: money is only valuable because other people think it’s valuable.
Whether it’s Central Bank of Nigeria notes and coins, shells, cowries, precious stones or matchsticks – all of which have historically been used like money – it only works when everyone trusts it. The main reason so many people are delighted about Bitcoin is that it solves those problems.
It depends upon a special unique type of database called a Blockchain, which is like a huge book – one that Bitcoin owners have independent but identical copies of. Every time a Bitcoin is sent from me to someone else, a record of that transaction goes into everyone’s book. Nobody – not banks, not governments, or the person who invents it – is in charge or can change it.
There is some very clever mathematics behind all this, but this means that Bitcoins can’t be faked, they can’t be hacked and can’t be double-spent. But, this OneCoin had no Blockchain that regulates it, people who invested in it and sees an increment in their investments but unknowing to them this wasn’t done by the BlockChain but by an individual who just puts in numbers to fool the investors. And, when the news of OneCoin not having a Blockchain broke out people starts panicking and questions were been asked.
Dr Raju, who was supposed to show for one of her conference in Lisbon later that year didn’t show up and has fled. It’s hard to know how much money has been put into OneCoin. Documents leaked to the BBC say €4bn between August 2014 and March 2017.
I’ve also been told by more than one person that it could be as much as €15bn. Earlier this year, the FBI had a lead that she is in either Greece or Romania, Dr Ruja could be extradited to the US if found there. If it’s true she was in these countries earlier this year, she probably has a fake identity and that makes it very hard for the agency to spot, some even said she has done a plastic surgery which makes it more difficult.
Dr Ruja, really did her research and identified several of society’s weak spots and exploited them for her own use. She knew there would be enough people either desperate enough, or greedy enough, or confused enough to take a wager on OneCoin and it happened. She understood that truth and lies are getting harder to tell apart when there is so much contradictory information online. She spotted that society’s defence against OneCoin – the law-makers, the police, and also we in the media would struggle to understand what was happening.
And, most frustratingly of all, she correctly guessed that and by the time we realized what has happened, she was long gone with the money.