# OneCoin Ponzi Scheme: The $4 Billion Cryptocurrency Scam Explained

OneCoin, founded in 2014 by Ruja Ignatova, claimed to operate like a legitimate cryptocurrency. However, lacking a real blockchain, it functioned as an elaborate Ponzi scheme that duped investors out of $4 billion before its implosion. Despite claiming to offer educational courses, these materials were plagiarized and part of a multi-level marketing trap. The firm's downfall saw Ignatova vanish, leaving co-founder Sebastian Greenwood jailed, while countless investors were left to deal with the fallout.

  

*   OneCoin was a cryptocurrency-based Ponzi scheme that amassed $4 billion between 2014 and 2016.  
    
*   The company's founder, Ruja Ignatova, disappeared in 2017, while co-founder Sebastian Greenwood was sentenced to 20 years in prison.  
    
*   OneCoin claimed to be a legitimate cryptocurrency, but it lacked a blockchain model or actual payment system.  
    
*   The scheme heavily relied on selling plagiarized educational materials as part of a multi-level marketing strategy.  
    
*   Despite its size, OneCoin was never actively traded, nor could its coins be used in actual transactions.

  

## How the OneCoin Scheme Operated 

Ruja Ignatova launched OneCoin in 2014, claiming it functioned like any other [cryptocurrency](https://www.investopedia.com/terms/c/cryptocurrency.asp). The claim was that OneCoins could be mined (with 120 billion coins available) and used to make payments, even having an e-wallet. However, OneCoin lacked a blockchain model or payment system.

The company primarily sold educational materials, like cryptocurrency courses. The courses included other areas as well, such as trading and investing. The courses were part of a [multi-level marketing](https://www.investopedia.com/terms/m/multi-level-marketing.asp) (MLM) scheme, where buyers were offered rewards for bringing in more participants.

Buyers of the course packages were to receive tokens that could be used to mine OneCoins. Much of the course material offered was said to be plagiarized.

## Inside the OneCoin Exchange: xcoinx

OneCoin Exchange xcoinx was an internal marketplace for converting OneCoin into other currencies. Members were able to access the exchange if they bought more than just the beginner package.

Selling limits were placed on the accounts based on the level of education package purchased. In January 2017, the exchange was shut down. Leading up to the shutdown, OneCoin denied the majority of withdrawal requests. The exchange was the only way for affiliates to cash out.

## Investigations and Legal Actions Against OneCoin

In 2016, questions started to come up about OneCoin as many countries began to investigate the company, with some calling it a pyramid scheme. In March 2016, Norway's Direct Selling Association first labeled OneCoin as a pyramid scheme. In May 2016, the Hungarian Central Bank warned against OneCoin being a pyramid scheme.

In 2017, OneCoin claimed it was the first company to become licensed by the Vietnamese government and legally allowed to be used as a digital currency. The Vietnamese government rebutted the claim.

In early 2018, the Bulgarian police raided the company’s office. Founder Ruja disappeared in 2017 when a warrant was filed for her arrest. Her brother, Konstantin Ignatov, replaced her as the face and manager of the company. Co-founder Greenwood was arrested in 2018 and Konstantin was arrested in November 2019.

Konstantin pleaded guilty to fraud and money laundering. Greenwood was sentenced to 20 years in prison. OneCoin was never actively traded, nor could the coins be used to purchase anything.

## Has Ruja Ignatova Ever Been Found?

Ruja Ignatova, the Bulgarian founder of OneCoin, known as Cryptoqueen, has not resurfaced since going into hiding in 2017.

## What Are the Biggest Crypto Ponzi Schemes?

There have been a number of other big Ponzi schemes in addition to OneCoin, the biggest crypto scheme ever. Bitconnect was exposed in 2018, ultimately crashing and causing its investors to lose $3.5 billion. PlusToken scammed investors until 2019, when it was closed down, after costing investors over $3 billion. GainBitcoin was an India-based coin that robbed investors of over $300 million before it closed down. Mining Max scammed investors out of $250 million until authorities shut it down in 2021.

## How Much Is One Bitcoin Worth?

The price of Bitcoin varies, but as of September 2023, was trading at $26,551. The price has fluctuated between roughly $26,000 and $67,500 over the 12 months between June 2021 and September 2023.

  

## The Bottom Line

OneCoin, founded by Ruja Ignatova, was exposed as a $4 billion Ponzi scheme masquerading as a cryptocurrency venture. The scam involved selling educational materials through a multi-level marketing model while falsely promising cryptocurrency mining and trading capabilities. With no legitimate blockchain or cryptocurrency exchange, OneCoin failed to deliver on its promises. Ignatova remains missing, while co-founder Sebastian Greenwood has been imprisoned and other leaders have faced legal consequences. Investors should exercise caution and conduct thorough due diligence before participating in any cryptocurrency venture to avoid similar fraudulent schemes.  

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