OneCoin founder Ruja Ignatova stole 4 billion US dollars of its investors before disappearing without a trace. She has been shopping in Malta long before the meteoric rise of her fraudulent crypto business.
“For a while Ruja may have been experimenting with the murky world of Maltese gambling sites,” writes journalist Jamie Bartlett in his new book The Missing Crypto Queen. “Malta was a well-known ‘gateway’ location for transferring money to and from the EU, and the small island nation had a thriving online gambling industry.”
Bartlett’s new book describes how, in early 2015, OneCoin was finding it increasingly difficult to move large amounts of money through banks. Thus, Ignatova experimented with the use of a proven method of transferring dirty money, including by the Italian underworld – Maltese online gambling companies.
Ignatova or someone holding nominee status on her behalf used a Bulgarian company formation agent to set up several companies in Malta, all based at the same address: 1, Birds of Paradise, Mosta. These entities were owned by trust companies established in Curaçao, a small island nation in the Caribbean.
But Ignatova had already started testing the Maltese waters long before setting up these companies.
Based on previous research by The Shift, it is possible that ACT Consultus Ltd (which has since been renamed) was the main training company behind Mosta’s address. It was previously based at Villa Malitah and is run by a Bulgarian gambling consultant.
“In May 2015, Ruja created an online gambling site called Coin Vegas which was marketed as part of the OneCoin family,” writes Bartlett, “although very little actually happened there.”
Publicly available videos of Ruja’s presentation in Dubai in 2015 launching this new venture describe Coin Vegas as being operated by a Maltese company, with LGA license (since renamed MGA) No. LGA/CL1/2009/599.
The mother of all pyramid schemes
OneCoin claimed to be the next cryptocurrency to take on Bitcoin, the most popular digital currency powered by blockchain technology, but there was one crucial difference.
Bitcoin transactions are recorded on what is called a distributed ledger. Each person who holds a Bitcoin wallet is a node in the network, and transactions are verified and recorded using the collective computing power of everyone involved. Any wallet holder can view every transaction made on the Bitcoin network using this ledger.
OneCoin has never been backed by such a registry. Investors were duped into thinking that the digital coins they were buying would eventually be usable in online exchanges when in reality they had no intrinsic value and no network to enable transactions between future users.
Basically, Ruja Ignatova was selling hot air.
Ignatova’s over-the-top promotional events and her penchant for selling the business to investors as a once-in-a-lifetime opportunity propelled OneCoin onto the global stage.
The psychological phenomenon of “FOMO” (Fear Of Missing Out) is a common leverage point in the cryptocurrency world, where investors want to seize opportunities early that are bound to rise in value later. OneCoin has capitalized on this fear by promoting itself as the next go-to destination for investors hoping to go big, with Ignatova claiming it will surpass Bitcoin’s market capitalization and performance.
Ignatova took her scam further by using multi-level marketing techniques and forming promotional partnerships with pre-established resellers. Bartlett estimates that more than a million people subscribed to his claims – and then it was all gone, along with their hopes and savings. In total, Ignatova is estimated to have defrauded investors out of approximately US$4 billion.
Ignatova disappeared while boarding a flight from Sofia to Athens on October 25, 2017. Her brother Konstantin took over the business and was arrested in 2019, but he claims his sister scammed him along with everyone else.
Four years after Ignatova’s disappearance, her former security chief and close adviser, CEO of economic intelligence firm Sandstone, has been arrested in France in connection with the scam and is fighting her extradition to the states -United.
Ignatova has been placed on the FBI’s 10 most wanted list, with Interpol releasing a to remark asking every police force in the world to arrest her if she was identified, but Bartlett says she may have altered her appearance with plastic surgery to evade capture.
You can find out more about “The Missing Crypto Queen” by listening to the BBC’s podcast on the Bartlett investigation here.