OneCoin aka the Real World Laxmi Chit Fund

Built Up

Bitcoin started gaining popularity post the 2013 Bull run. The price of BTC flew from $12 in January to $1,200 by the end of the year. It caught media attention and all finance journalists started covering news and debated about the trending coin. This must also be a time when you, your friends or relatives might have first heard the term Bitcoin. Many Alt coins also started coming up. Cryptocurrency had become a hot topic and many retail investors started feeling the FOMO of not buying bitcoin when it was around $12.

Bitcoin chart 2013-14

The Mastermind

OneCoin was founded in 2014 by a Bulgarian resident named Ruja Ignatova (aka Anuradha of the big Hera Pheri) in partnership with Sebastian Greenwood. She is also known as “CryptoQueen” popularly. She saw the rise of Bitcoin and that is what inspired her to create her own crypto ‘OneCoin’. Though this was not her first attempt to create crypto, she launched ‘BigCoin’ earlier which failed.OneCoin was promoted as based in Bulgaria with it’s off shore companies OneCoin Ltd and OneLife Network Ltd being registered in Dubai and Belize respectively. (How Fishy!). She was confident that OneCoin will bring a revolution and will be more easier and user friendly than Bitcoin. She in fact also made statements that OneCoin would bury Bitcoin and that no one would talk about Bitcoin in the Future.

As ambitious a woman she was, she wanted to promote OneCoin all over the world. She aggressively carried out meetings, presentations and conventions in various countries in a short time. The funniest of them I find is the one held at the Wembley Stadium in United Kingdom in June 2016, where she wore a blingy and shinny red dress and looked as if she was going for some fashion event. In the same event she announced that they had over 2 million active users and had received 4.5 billion Euros in a year and half’s time.

Business Plan
The plan of action of OneCoin Ltd was to sell educational course material. The course material was mainly basics of cryptocurrencies and how to trade and invest in them(the content of the course was highly plagiarized). The course had a MLM (Multi-Level Marketing) scheme where the buyer of the course was given incentives for getting referrals. They would receive incentives in form of tokens which they could in-turn use to mine OneCoin. Ruja used MLM very cleverly to play with the emotions of people and market OneCoin.

The Cyrpto without a Blockchain !

What the hack!! A Crypto without a blockchain how is that even possible ? The basic fundamentals of cryptocurrency are that it is based on blockchain technology which is a decentralized ledger and all the transactions are recorded in it. OneCoin lacked this basic feature and did not have a blockchain. In October 2016(four months after the London Conference), Bjorn Bjercke who is a blockchain expert was called by a recruiting agent. The agent offered him a job in a cryptocurrency company. Mr. Bjercke on questioning what his job would be got a shocking answer that they need a blockchain and wanted his help to build it. He immediately refused the job. The company was OneCoin and that’s how everyone got to know that OneCoin was just scamming people in the name of Cryptocurrency.
Key Points that Came Out:
1) There was no blockchain and it worked on an ordinary SQL technology.
2) There was absolutely no safety and security.
3)Prices were manipulated on the website.

In spite of the news breaking out that OneChain did not have a blockchain, many poor investors were unaware about this and continued to fall for the Ponzi scheme. Dr. Ruja continued her world tour to pull in new investors. OneCoin continued to grow and our Maharani Ruja started spending her fortune which she was building. She bought luxurious properties in Bulgaria and threw parties in her Yacht every now and then.

How did people get aware about the Rug Pull ?
Ruja had promised the Investors of an Exchange that would turn invested OneCoin to fiat and vice versa. Investors started panicking and got worrisome after the exchange opening was delayed. Finally it was announced that in October,2017 the promoters would meet and they would announce about the launch of the Exchange. When the day arrived, Ruja went missing. She was totally unreachable and all messages and calls went unanswered. People speculated that someone from the banks or government killed or kidnapped her, after all Crypto is a potential threat for banks.

FBI later reported that she had boarded a flight from Sofia to Athens two weeks after the event at Lisbon. Post that she completely disappeared.

One of the Biggest Victim of the Scam

Jen McAdam a resident of Glasgow, Scotland was invited to an OneCoin webinar by a friend. The webinar talked about how OneCoin can be a life changing opportunity and could change fortunes. It had such motivating and high tempo speakers, that very quickly Jen was convinced to invest. Over the one hour webinar, Jen’s interest continued to increase as the speakers talked about the glorious background of Dr.Ruja, her PHD from Konstanz, Oxford University etc. She initially decided to invest €1,000 but the speakers persuaded her to invest in the ‘Tycoon’ package for €5,000.

In no time she persuaded even her family and friends to invest and they all together invested a whooping €250,000. As days passed by she kept checking the OneCoin website and was happy seeing her returns grow at a rocket speed.

Jen in an interview with BBC

The happiness came to a standstill when a stranger Timothy Curry, a Bitcoin enthusiast contacted her. He wanted to blow the whistle off OneCoin so as to prevent Cryptocurrencies’ reputation. Through several videos, blogs he tried to explain Jen about Blochchain and how cryptos work. Initially Jen resisted but later on being convinced, she contacted the leaders of OneChain. Some refused to comment, some said she didn’t need to know and then finally one replied back that their Blochchain works on SQL (Look at the audacity of the guy😂). By this time Jen had learnt about the concept of Blockchain thanks to Tim and got the shock of her life. Jen not only ended up putting herself into a big financial loss but also her friends and family. The movie Fake! is inspired by this.

What happened Next?

The governments of all major countries declared it a scam and Ponzi scheme. Times of India defined it as the biggest scam in history. Ruja and all others involved have been convicted and jail punishments have been declared in several countries. Investors like Jen McAdam who have faced huge losses are also fighting cases in their individual capacity. Ruja still remains underground. However the chances of any recovery are absolutely minimal.

CONCLUSION:

Crypto is not a get rich quick scheme, you will get poor faster if you think so! Always do your research and analysis about the project before investing in it. Do read the white paper to study about How the project works?, What are its aims?, The Supply, The Market Cap, etc. If you are a beginner start by investing only in the top 50-100 coins which are listed in leading exchanges like CoinDCX. Do not put others into risk when you urself are not aware about the details of a coin. Crypto is amazing but also there are a bad people involved, so be careful and goodluck ahead 😉

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