OneCoin Scheme Collapses

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OneCoin

Onecoin ran a large Ponzi scheme, which successfully tricked investors to invest over $4b. There was no blockchain behind the token, and the only way to exchange it to cash was through an exchange which shut down in January 2017. The founder is still at large.

This is a global/international case not involving a specific country.

About OneCoin

"OneCoin [was] promoted as a cryptocurrency by Bulgaria-based[ offshore companies OneCoin Ltd (registered in Dubai) and OneLife Network Ltd (registered in Belize), both founded by Ruja Ignatova in concert with Sebastian Greenwood." "Ruja Ignatova started OneCoin in 2014, claiming it worked just like any other cryptocurrency. The claim was that OneCoins could be mined (with 120 billion coins available) and used to make payments, even having an e-wallet. However, there was no OneCoin blockchain model or payment system."

"The company did sell educational materials, such as courses on cryptocurrencies. This was considered its main business. The courses included other areas as well, such as trading and investing." "Much of the course material offered was said to be plagiarized." "The courses were part of a multi-level marketing (MLM) scheme, where buyers were offered rewards for bringing in more participants."

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

"On 1 March 2016, without notice, OneCoin issued an internal notice that the market would be closed for two weeks for maintenance, explaining that this was necessary due to the high number of miners and for "better integration with blockchain". On 15 March 2016, the market opened again but no visible changes had been made; most of the transactions expired as before and daily limits stayed on."

"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."

“The only way to become part of the IPO. You will be able to exchange these OneCoins over the next month into so-called OFCs. An OFC is a future certificate that entitles you to receive shares in the company OneCoin that will be listed on the stock exchange.”

"OneCoin was a cryptocurrency-based Ponzi scheme. The companies behind the scheme was OneCoin Ltd. and OneLife Network Ltd., founded by Bulgarian national Ruja Ignatova, who disappeared in 2017. However, not before the scheme raised $4 billion."

"OneCoin is to blame for the loss of over $30 million in invested funds, making it one of the most widespread cryptocurrencies that were proven to be scams. Unfortunately, the fake cryptocurrency is hard to pin down, as it has made splashes in Vietnam, China, India, Bulgaria, and Italy (just to name a few), without actually being licensed in any of them. Until OneCoin is completely dismantled, many nations are on high alert for signs of the fraudulent organization."

"OneCoin is a sophisticated multi-layered Ponzi scheme. The company was busted in India and some of the European countries. People have spent millions on ICO despite the fact that OneCoin doesn’t even have a public ledger and official license. What makes this ICO one of the top-level scams is that after 2.5 million euro fine in Italy and $30 million fine in China this company keeps existing. If you want to know it, they didn’t develop anything new since the times when their crimes were revealed."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - OneCoin Scheme Collapses

Date	Event	Description
January 15th, 2017 12:00:00 AM	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Total Amount Lost

The total amount lost has been estimated at $4,000,000,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

The total amount recovered has been estimated at $58,000,000 USD.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Prevention Policies

Which policies could have prevented this event from happening?