Dr. Ruja:Crypto-Queen or Klepto-Queen

Dr. Ruja:Crypto-Queen or Klepto-Queen

Background:

Find anything common with the glamorous Klepto-Queens in history----beauty, brains, and bluster. Using this combination Ruja Plamenova Ignatova born in a middle class in Bulgaria on 30th May 1980 garnered a net-worth of $ 4 billion in three years. She disappeared on 25th October 2017 and joined the list of FBI’s Ten Most Wanted Fugitives(and the only Woman) in 2022.The story satisfies the classic definition of Magic Realism—painting a realistic view of the world, while adding magical elements often blurring the lines between fantasy and reality.

Background: At the age of 10, she migrated to Germany with her and in 2005 earned a PhD in International law. Reportedly worked for a short period with McKinsey & Co. In 2012 she got her first criminal record, convicted for fraud in Germany in connection with acquisition of a company that within no time was declared bankrupt in dubious circumstances and was given suspended sentences of 14 months imprisonment.

In 2013(when Bitcoin was stratospheric) she was involved with a multi-level marketing scam called BigCoin (A fore-runner of OneCoin). To clarify, MLM is not illegal and her MLM supporter Igor Alberts became a multi-millionaire. Big companies Amway/Avon/Herbalife and Tupperware use this network marketing. But when there is nothing of value to sell, though, and all the money is made by recruiting other people, it is illegal and goes by another name: a pyramid scheme.

She was fluent in Bulgarian, German, English, French and Russian.?She married Bjorn Streghl, a real-estate lawyer and in?2016 she had a daughter.

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OneCoin:

In 2014 she founded OneCoin Ltd (registered in Dubai) along with One Life Network Ltd (registered in Belize), both founded in concert with Karl Sebastian Greenwood.?OneCoin was promoted as Cryptocurrency company, while being a typical Ponzi scheme due to its organisational structure of paying early investors using money obtained from newer ones. Like any other pyramid scheme, it recruited investors without providing them with any actual product. The company behind the scenes conducted unauthentic database entries not on blockchain and with no apparent mining.

She was the founder and face of OneCoin which was ?presented to investors/players that it would be a Bitcoin killer, and persuaded the aspirational prospector to invest heavily.

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In early June 2016, thousands of her adoring fans were entertained in Wembley Arena?dressed as usual, in an expensive ballgown, wearing long diamond earrings and bright red lipstick. She announced, like a woman on Fire, to the cheering crowd that OneCoin was on course to become the world's biggest cryptocurrency "for everyone to make payments everywhere".

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Cryptocurrency as an idea was just entering the mainstream. A huge number of people were looking to get involved in this strange new opportunity. OneCoin, Dr Ruja told the Wembley audience, was the "Bitcoin Killer". "In two years, nobody will speak about Bitcoin anymore!" she shouted. All over the world (about 175 countries), people were already investing their savings into OneCoin, hoping to be part of this new revolutionary product. In the first six months of 2016, Brits alone invested ￡25m.

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OneCoin like any other Cryptocurrency, was only as valuable as people think it is. Whether Bank of England notes and coins, paintings, historical artifacts or ?precious stones?- all of which have historically been used as money - it only works when everyone trusts it. For long, several people have experimented in different forms of currency(including digital),to get away from the onerous restrictions and burden of compliance of state-backed currencies. They have invariably failed, as they were not trusted. Acceptance of currency depends on the issuer and trust that follows.?OneCoin was proclaimed as unique, safe, global and with no risk of inflation. In Dr Raja’s words it was ?"borderless, safe and easy to use."

?For the young libertarians and for the ultra-rich who detest Govt control, this new form of currency, with the potential to side line the banks and national currencies and provide banking for anyone with a mobile phone was the Avatar they have been waiting for. And if you get in early, there is the chance to make a fortune. The Genius of Ruja was that she had the behavioural insights and sell only educational material call ?to the masses all over the world, as access to Cryptocurrency..

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While the public invested in OneCoin and the website showed the price increase, they still did not have an exchange where they could convert OneCoin to fiat currency. Anticipating exponential dividends, the investing public took holidays\shopped and made financial commitments.

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Dr Ruja's perceptiveness was to recognise that established MLM sellers with huge downlines were the perfect vehicle to market her fake coin - a plan the FBI says she privately referred to as "the bitch of Wall Street, meets MLM". This was the secret of One Coin’s success. It was not just a fake cryptocurrency, it was an old-fashioned pyramid scheme, with the fake coin as its "product". It is a little wonder it spread like wildfire, supported by the investors’ “conscious avoidance of unpleasant thoughts”

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While Dr.Ruja was still holding webinars(Economist conference in 2015 created the illusion of legitimacy) /mass meetings, cracks began to appear and some discovered that OneCoin was not on blockchain but on an SQL server, which was no basis for a genuine?Cryptocurrency, Her talks?were repetitive with borrowed cliches and big promises for success and wealth.? The company seems to have targeted a global category of aspirational investors who noticed the breathless coverage and booming valuations of cryptocurrencies and blockchain companies but weren’t savvy enough to understand the difference between the real thing and a sham. This danger exists in large part because grasping even the basics of blockchain technology remains daunting for non-specialists However there were other investors filling up Dr. Ruja’s arenas and her coffers were filling up. She invested the monies in multi-million-dollar properties/yachts. But the successful fa?ade did not mesmerise everyone and trouble was brewing. The investors were eager to monetise or “cash out” their investment.

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The opening of a long-promised exchange that would allow OneCoin to be encashed got delayed and investors were getting uneasy. Dr.Ruja promised to resolve the issue in October 2017, in Lisbon at a large gathering of European OneCoin promoters. Dramatically Dr. Ruja(who has never late herself and would refuse to meet persons late for appointment) did not show up. Her Head office was unaware of her whereabouts.

In fact, she had gone underground. FBI records presented in court documents earlier this year indicate that on 25 October 2017, just two weeks after her Lisbon no-show, she boarded a Ryanair flight from Sofia to Athens. And then went completely off radar. That was the last time anyone saw or heard from Dr Ruja. OneCoin failed on its launch pad while those who give her the benefit of doubt believe that her intentions were good but the scale of operations was too big for her to handle and the scheme fell on its face.

Her vanishing act attracted a large number of investigators.?One such was Jamie Bartlett who spent months investigating how she did it for?the BBC Missing Cryptoqueen podcast, and trying to figure out where she's hiding. The smash-hit BBC podcast also examines how OneCoin operates, and its human and social cost. The tech expert compares her scam to that of Bernie Madoff ($ 50 billion) and said, “Her arrest and conviction is the one thing that might actually stop crypto scams because it would send out a powerful warning to people to be wary.” He has also authored the book The Missing Cryptoqueen: The Billion Dollar Cryptocurrency Con and the Women Who Got Away with it.

It is alleged by US prosecutors that the scheme brought in approximately USD 4 Billion (Between?March 2014 and October 2017) while another estimate is as high as?Euro 15 Billion. The Chines law enforcers have recovered approx. USD 300 m prosecuting about one hundred persons. Dr. Ruja mysteriously disappeared in 2017, about the time a secret US warrant was filed for her arrest and her brother Konstantin Ignatov replaced her in OneCoin. Amazingly, even after this, OneCoin continued to function - and people continued to invest in it. As of date, most the alleged key collaborators ?have disappeared or been arrested(including Dr.Ruja’s corporate lawyer Mark Scott and her lover, Gilbert Armenta). Konstantin Ignatov (brother) was arrested on 6th ?March 2019 at Los Angeles International airport and is still?awaiting sentencing. Konstantin pleaded guilty to charges of money laundering and fraud. Co-founder Karl Greenwood (A citizen of Sweden and the U.K.), had been arrested at his home in Thailand in 2018; extradited to the U.S. has pleaded guilty to Federal charges on 16th December 2022.

Dr. Ruja is supposed to be travelling with a new name and a new passport, armed bodyguards and is on the run, probably with plastic surgery. She was charged in absentia with money laundering, by the Department of Justice.

The British AML expert Oliver Bullough(author of the illuminating books---Moneyland and Butler to the World) calls the OneCoin business strategy - the shadowy parallel world where criminals and the super-rich hide their wealth. The problem, he explains, is that following the money isn't as easy as it sounds, because criminals structure their companies and bank accounts in such a way that their assets seem to disappear. " Photos of Degrees/copies of Forbes magazine lend credibility and assist in building the aura of conviction which has misled millions.

For several months, a French journalist called Maxime Grimbert tried to unpick OneCoin's corporate workings, gathering as many company names and bank account details as he could. On seeing the results Bullough, immediately noticed how many of them were British and expressed the view that "British companies are the companies of choice, they’re very easy to set up and they look legitimate."

Like all private investigators, when you try to “Follow the Money”, in an inter-connected global economy, billions of assets can simply vanish, and one ends up chasing shadows. The OneCoin scam ran for three years as the Crypto journalists thought it was a simple Ponzi scheme nobody would fall for and the Ponzi investigators left it to the Crypto detectives in view of the sector it was pitched in. Similarly any warning about OneCoin was viewed dismissively by the prospectors as propaganda against OneCoin by Bitcoin lovers.

Bjorn Bjercke (aka Bitcoin Norway) the blockchain expert (who was offered the job of CTO in OneCoin in Oct 2016) who?whistle blew that OneCoin was not on blockchain received death threats. The business was a pyramid scheme based on smoke and mirrors more than zeroes and ones. It is believed that since Billions are involved the dark forces/nefarious criminals are involved in varying degrees in different countries in this scam.

The corporate structure of OneCoin is incredibly complicated and ownership multi-layered. While shell companies/spurious directors are liberally strewn in the compound, Oliver Bullough calls the dizzying arrangement as “improbably standard.” The fact that there were several upstarts in the cryptocurrency landscape around that time helped OneCoin hide its features which visibly would make the investor aware that it is a non-crypto scam. The Pyramid-marketeers found that using the name of the Crypto, the Ponzi scheme could be executed well from UK to Uganda and the speed of growth was mind-blowing.

Investors often say that they are drawn to cryptocurrency since they fear they would miss out on the next big thing. Engulfed with this idea they do not think straight and more attractive the?‘Get-rich-scheme’ is, the greed becomes sharper. They read with envy stories of people with Bitcoins becoming millionaires and thought OneCoin was a second chance. The attractive personality and persuasiveness of the Visionary??mesmerised them into think that she would change the world and felt that she was a leader of a Messianic cult. Many have no clue to the technology but the huge audience or presence at the economist conference is a huge confidence-builder. Not?unsurprisingly gullible investors are still buying the OneCoin tokens and they are traded daily.

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United States Attorney’s Office Southern District of New York has charged with wire fraud, securities fraud, and money laundering offenses. offering a reward of up to $100,000 for information leading to her arrest.

Technological innovation is always followed by bubbles and speculative gold rushes which give rise to the proliferation of scams and frauds, especially in crypto, but the case of OneCoin stands out as not only as one of the biggest scams of history (according to Time magazine) but also for its elaborately crafted business plan. There is a crying need for?any public offering to be regulated in any sector so that the unsophisticated investor does not fall an easy prey to such adept scamsters.

The Hunt for the Missing Crypto-Queen?continues.

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