When front page headlines describe your business as "one of the biggest scams in history," what's your next move? In the case of Ruja Ignatova, you go into hiding and nobody ever hears from you again. Once known as the "Cryptoqueen," Ruja might be hiding out with a stolen $7.5 billion Bitcoin fortune…
The Rise of the Cryptoqueen
In 2013, Bitcoin saw its first massive price jump and really entered the mainstream. In October 2013, a single Bitcoin would cost you $120. Just two months later, Bitcoin topped $1,000 for the first time.
The extreme rise created many millionaires practically overnight. It also injected countless people with a serious case of FOMO. And when people want nothing more but to be rich – and feel they barely missed it – they're extremely vulnerable.
At the time Ruja Ignatova was 36 years old. The already-convicted Bulgarian fraudster decided to take advantage of the moment and launch her own cryptocurrency. She called it Onecoin.
The premise of Onecoin was pretty traditional as far as cryptocurrency goes: a decentralized, easy, and safe currency that will almost-certainly rock the current financial world and become the world's #1 payment of choice. So, um, get in now to make a ton of money and don't miss out like you did on Bitcoin. Not Ruja's exact words, but that was essentially her angle.
Ruja was a persuasive show-woman. She spent most of her time traveling to speaking events where she would woo the crowd with a once-in-a-lifetime opportunity to be at the forefront of the next revolution. People bought in… big time.
It's not fully known just how much money investors put into Onecoin. Some estimates report the amount invested to be anywhere from $5 to 20 billion between 2014 and 2017.
One woman who was certainly not rich, Jen McAdam, invested $10,000. Jen also convinced family and friends to add an additional $250,000. More on Jen in a minute, but she's just one example of thousands of people who bought into Ruja's vision, sometimes put up their entire life savings, and watched as it grew before their eyes. The feeling of getting rich is addicting, so they would find even more to put in. Things were looking good for these early investors.
There was only one problem: Onecoin didn't even have a blockchain.
Onecoin's Fatal Flaw
If you don't know what a blockchain is, you're in the same camp as most crypto investors. To keep it super simple, by definition a cryptocurrency cannot actually exist without one.
In October 2016, a blockchain expert named Bjorn Bercke was contacted by a recruitment company with a job offer: to be the CTO of a cryptocurrency startup out of Bulgaria. The pay was going to be more than $250,000 along with a car and other perks.
Interested, Bjorn asked what his responsibilities would be and the recruiter replied: "Well, first of all, they need a blockchain. They don't have a blockchain today."
"I thought this was a cryptocurrency," Bjorn asked. "What's the company?"
Yikes. Onecoin had already been operational for two years and accepted billions in investments at this point. This would be like you giving me money for a Ferrari and there's no engine. No wait, this would be like you giving me money for a Ferrari and you don't get a Ferrari. Enjoy this IOU.
Bjorn didn't take the job. To make a long story short, he was introduced to Jen McAdam who was beginning to grow suspicious among her online Onecoin groups. As Ruja was still traveling the world on private jets and yachts, spreading her vision, Bjorn and Jen essentially became whistleblowers, slowly exposing the truth that all the value was basically in the persuasion of Ruja Ignatova.
Initially, investors were irate when Jen and Bjorn would point out what, in hindsight, seemed obvious. After all, when you're financially dug into something, the last thing you want to hear is that it's a bad investment, let alone an alleged scam. But as more and more investors began to swallow the hard-to-digest pill, Onecoin began crumbling.
It should be mentioned that during all of this, it was still impossible to turn your Onecoin into cash. So if you put in $5,000 and watched it go to $500,000 – which many people did – you still couldn't actually get your money out. The exchange was continuously delayed for a multitude of fake reasons while the real one was… well, it wasn't real cryptocurrency.
Ruja On The Run
Fast forward slightly to October 2017. Ruja, now aware that Onecoin was crumbling, was scheduled to resolve all of these concerns in Lisbon, Portugal at a large gathering for Onecoin. She promised to explain everything and set the record straight.
She actually decided to do something else. She didn't show up at all.
She has not been seen since.
A 2019 podcast called The Missing Cryptoqueen by Jamie Bartlett aimed to figure out where Ruja was hiding. By the end, the best conclusion was that she is somewhere in Frankfurt, Germany where her ex-husband and child are apparently living. Some even stated she would still travel between Athens, Greece and Frankfurt, hiding in plain sight thanks to plastic surgery and an alternate identity. Others believe she's dead. But the conclusion is the same either way: we really don't know.
Assuming she is alive and has a new identity, she's extremely rich. Ruja allegedly owns 220,000 Bitcoin right now. At today's $33,700 Bitcoin price, those coins are worth around…
And keep in mind that a few months ago, those same 220,000 Bitcoin were at one point worth $15 BILLION! Which would have made Ruja one of the 140 richest people in the world.
Ruja's Alleged Bitcoin Fortune
In court documents filed this year by Onecoin victims, they allege that Ruja had a relationship with Sheik Saoud, the son of one of the wealthiest people in Dubai. She supposedly was able to gain Diplomatic credentials from the United Arab Emirates, allowing her to travel with impunity. Ruja had allegedly been funneling billions from Onecoin into Dubai real estate and banks.
The claims allege that she funneled billions into Dubai's real estate and banking industries.
While the idea behind cryptocurrency is fascinating and hopeful for the future, it doesn't come without risks as the story of Onecoin demonstrates.
The attorney for the Onecoin victims said, "Regulators seem oblivious to the fact the cryptocurrency's main purpose is to facilitate and reward criminals like Ruja Ignatova. It is no coincidence that Ignatova is the main beneficiary of the Bitcoin bubble."
Regardless of which side of the cryptocurrency aisle you sit on, it's still evolving and not without troubles. But then again, what – and who – isn't?