The Lacking Cryptoqueen: The Billion Greenback Cryptocurrency Con and the Lady Who Obtained Away with It, by Jamie Bartlett, Hachette Books, 320 pages, $29
Newcomers to bitcoin typically dismiss the cryptocurrency as a pyramid or Ponzi scheme. The OneCoin rip-off exhibits what it actually appears like when a pretend blockchain serves as cowl for a multilevel advertising and marketing fraud that pays early buyers with funds from new marks.
Right here we see the near-messianic pageantry frequent to overhyped tasks. We see Matryoshka armies of worldwide holding firms and frontmen. We see starry-eyed everymen scrambling to speculate each final household greenback in “instructional supplies” that include “free” cash (to keep away from triggering laws). We see Curaçaoan banking consortia, Maltese playing issues, and a mysterious maven manipulating every part behind the scenes earlier than absconding all of the sudden into the night time.
Jamie Bartlett’s The Lacking Cryptoqueen particulars the sleazy rise and unsatisfying fall of the OneCoin con whereas investigating the attainable whereabouts of the swindler behind all of it: a runaway wannabe-fashionista from Bulgaria named Ruja Ignatova.
In an business rife with swindles, OneCoin is in a league of its personal.
It is not uncommon for cryptocurrency tasks to overpromise on expertise or skimp on safety, resulting in massive losses available on the market or in person wallets. It’s not regular for a cryptocurrency to be structured like a multilevel advertising and marketing scheme, paying “buyers” extra on an outlined schedule once they recruit others. Neither is it regular for the coin to be fully managed by a for-profit firm with none precise blockchain in any respect, unbeknownst to the various keen “package deal holders.” Consequently, no different alleged cryptocurrency has managed to concoct a mammoth Ponzi scheme leading to $4 billion to $15 billion in losses. Solely Bernie Madoff can evaluate.
Ignatova had no experience in pc science or expertise. Her essential promoting factors had been that she was once a guide at McKinsey—so spectacular—and appreciated to put on lengthy robes and purple lipstick. This, mixed along with her unique Germano-Bulgarian accent and hyperlinks with numerous Sofia elites, proved sufficient to dazzle gullible targets into placing far an excessive amount of cash into her blockamamie scheme.
Bartlett, who chronicled the early bitcoin and up to date cypherpunk communities in his 2014 work The Darkish Web, teases out what few threads we’ve got on the furtive Ignatova to weave a portrait of an bold and shameless con girl who stopped at little or no to challenge the picture of herself that she needed onto the world. She needed to be wealthy, she needed to be glamorous, and he or she needed to be well-known. Precisely how she obtained there was not her concern.
In 2013, Ignatova teamed up with Sebastian Greenwood, a key grifter on this story, who was at that time hawking a “new Fb” multilevel advertising and marketing scheme referred to as SiteTalk. He was impressed by Ignatova’s “bitcoin, however for pensions” convention concoction and noticed a chance to mix the hype-driven worlds of cryptocurrency and multilevel advertising and marketing to extract most income. They shamelessly ripped off an present hybrid referred to as BigCoin and slapped a brand new identify on it: OneCoin.
The masterminds behind OneCoin clearly thought little about such trifling particulars as launching a blockchain or coin economics. Reasonably, they targeted their energies on recruiting prime multilevel advertising and marketing expertise: They poached prime sellers from present pyramids and tried to promote them on the OneCoin thought. The pitch was mainly that this ball-gowned Bulgarian would kill bitcoin and “make you wealthy.” For no matter purpose, this was sufficient to provide OneCoin momentum, and the rip-off began promoting itself.
One power of The Lacking Cryptoqueen is Bartlett’s capacity to mix gripping storytelling with the slightly dry regulatory context and legalese needed to know how Ignatova pulled this off and simply how brazen the endeavor was. For instance, the OneCoin workforce knew that if their pyramid offered cash immediately, they might simply run afoul of securities laws, as they might primarily be paying commissions on inventory buying and selling. As a substitute, the workforce offered “instructional supplies” about OneCoin that had been tied to “free cash.” A “starter pack” price €100, or $138 USD, for a PDF and round 200 cash; a “Tycoon Dealer” package deal would run you $6,900 for 5 PDFs and 28,000 cash.
Should you offered Tycoon Dealer packages to different marks, you’ll get a reduce of any gross sales they made after that; that is your “downline,” and it is the place the true cash is made in multilevel advertising and marketing schemes. The thought is to broaden your downline as a lot as attainable. In observe, this implies cajoling family and friends members into the pyramid. The highest tiny %, referred to as the “Crown Diamonds,” made off with tens of millions in downline commissions. The overwhelming majority made hen feed, however there was at all times the promise that OneCoin would “go public”—be traded on a significant alternate like Binance—and get a ticket “to the moon.”
The forex itself was an enormous pretend. Purchasers would see cash of their pockets after buying an academic package deal. However there was no blockchain there in any respect, only a database that may credit score and debit as requested—at the very least often. The one alternate on which OneCoin could possibly be traded, xcoinx, was secretly owned by OneCoin, which manipulated the worth. One other stress valve was Dealshaker, supposedly an Amazon killer, the place OneCoin promoters might promote tchotchkes for his or her pretend cash. The web sites had been amateurish and hardly purposeful, with misspelled FAQ pages.
On paper, individuals had been millionaires. Xcoinx would restrict gross sales, set the worth, and arbitrarily double the cash to make individuals really feel like they had been wealthy. They earnestly believed they might retire to a yacht someday. This hope was sufficient to maintain dupes holding the bag for a lot too lengthy; as Bartlett wrote his e book, some cussed devotees had been nonetheless holding and buying and selling OneCoin. In the meantime, Ignatova and her co-conspirators handled the OneCoin financial institution accounts like private piggy banks, shopping for multimillion-dollar properties internationally and investing in sketchy tasks nonetheless they noticed match.
Ignatova and her cronies by no means cared about OneCoin. They did not care in regards to the concepts they threw round in public, like “banking the world’s poor” or the “monetary revolution” and even killing bitcoin. They needed to make cash and get out, and Bartlett marshals the panicked communications that present Ignatova scrambling for an exit whereas the worldwide monetary surveillance system crashed down onto her billion-dollar fraud. OneCoin stored chugging to the bitter finish, operating on fumes and a phantom employees effectively after Ignatova disappeared someplace inside Greece in 2017. Bartlett’s greatest guess is that she resides in worldwide waters within the Mediterranean Sea.
This e book is filled with scurrilous subplots and cheesy characters, and it affords an illuminating have a look at the world of worldwide finance and the various traps that ultimately did OneCoin in. It comes at an opportune time, given the general public’s ample urge for food lately for an excellent rip-off story. Hulu’s The Dropout and Apple TV’S WeCrashed obtained loud buzz by dramatizing how narcissists can exploit techno-optimism and plain outdated human greed. The previous covers Elizabeth Holmes and her bloodsucking Theranos rip-off, whereas the latter tackles WeWork, Adam and Rebekah Neumann’s kombucha-soaked and Imaginative and prescient Fund-ed workplace cult.
Maybe we’ll see an analogous streamed or televised remedy of “Dr. Ruja,” as she insisted on being referred to as, and the black gap of the OneCoin world. Like Holmes and the Neumanns, she makes a fantastic villain. However Ignatova is totally different, and arguably extra sinister, than these better-known charlatans.
Theranos and WeWork humiliated elites who poured of their cash and reputations primarily based on the attraction and visions of their charismatic founders. These firms definitely damage many common individuals alongside the way in which; WeWork exploited its workers, whereas Theranos uncovered sufferers to probably lethal well being misinformation. However by way of funding, it was largely the well-to-do who had been on the hook.
With OneCoin, against this, Ignatova and her workforce of legal professionals, moneymen, model consultants, and multilevel advertising and marketing maestros shamelessly focused and stole from common individuals—in lots of circumstances, among the world’s most susceptible. Even Ignatova’s brother Konstantin, who ran the rip-off after Ruja disappeared, felt a twinge of guilt as he hawked OneCoin packages to unsuspecting farmers in Mbarara, Uganda.
The complication with multilevel advertising and marketing frauds and Ponzi schemes is that the victims are sometimes accomplices. They’re so blinded by guarantees of riches that they harangue family members to hitch, utilizing the identical lies that labored on them. This will encourage individuals to double down on their beliefs, as a result of admitting that you just had been suckered right into a fraud additionally means admitting that you just lured your loved ones with the identical false guarantees.
The Lacking Cryptoqueen is an interesting look into the schematics and psychology of a rip-off. Let’s hope extra individuals be taught in regards to the OneCoin debacle and the girl behind it. On a regular basis individuals want to guard themselves in opposition to such predation, whether or not or not Ignatova ever sees her day in courtroom.
This text initially appeared in print underneath the headline “ScamCoin”.