Jamie Bartlett’s gripping look at the schematics and psychology of a scam

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Newcomers to bitcoin sometimes dismiss the cryptocurrency as a pyramid or Ponzi scheme. The OneCoin scam shows what it really looks like when a fake blockchain serves as cover for a multilevel marketing fraud that pays early investors with funds from new marks.

Here we see the near-messianic pageantry common to overhyped projects. We see Matryoshka armies of international holding companies and frontmen. We see starry-eyed everymen scrambling to invest every last family dollar in “educational materials” that come with “free” coins (to avoid triggering regulations). We see Curaçaoan banking consortia, Maltese gambling concerns, and a mysterious maven manipulating everything behind the scenes before absconding suddenly into the night.

Jamie Bartlett’s The Missing Cryptoqueen details the sleazy rise and unsatisfying fall of the OneCoin con while investigating the possible whereabouts of the swindler behind it all: a runaway wannabe-fashionista from Bulgaria named Ruja Ignatova.

In an industry rife with swindles, OneCoin is in a league of its own.

It is common for cryptocurrency projects to overpromise on technology or skimp on security, leading to large losses on the market or in user wallets. It is not normal for a cryptocurrency to be structured like a multilevel marketing scheme, paying “investors” more on a defined schedule when they recruit others. Nor is it normal for the coin to be completely managed by a for-profit company without any actual blockchain at all, unbeknownst to the many eager “package holders.” Consequently, no other alleged cryptocurrency has managed to concoct a mammoth Ponzi scheme resulting in $4 billion to $15 billion in losses. Only Bernie Madoff can compare.

Ignatova had no expertise in computer science or technology. Her main selling points were that she used to be a consultant at McKinsey—so impressive—and liked to wear long gowns and red lipstick. This, combined with her exotic Germano-Bulgarian accent and links with various Sofia elites, proved enough to dazzle gullible targets into putting far too much money into her blockamamie scheme.

Bartlett, who chronicled the early bitcoin and contemporary cypherpunk communities in his 2014 work The Dark Net, teases out what few threads we have on the furtive Ignatova to weave a portrait of an ambitious and shameless con woman who stopped at very little to project the image of herself that she wanted onto the world. She wanted to be rich, she wanted to be glamorous, and she wanted to be famous. Exactly how she got there was not her concern.

In 2013, Ignatova teamed up with Sebastian Greenwood, a key grifter in this tale, who was at that point hawking a “new Facebook” multilevel marketing scheme called SiteTalk. He was impressed by Ignatova’s “bitcoin, but for pensions” conference concoction and saw an opportunity to combine the hype-driven worlds of cryptocurrency and multilevel marketing to extract maximum profits. They shamelessly ripped off an existing hybrid called BigCoin and slapped a new name on it: OneCoin.

The masterminds behind OneCoin clearly thought little about such trifling details as launching a blockchain or coin economics. Rather, they focused their energies on recruiting top multilevel marketing talent: They poached top sellers from existing pyramids and tried to sell them on the OneCoin idea. The pitch was basically that this ball-gowned Bulgarian would kill bitcoin and “make you rich.” For whatever reason, this was enough to give OneCoin momentum, and the scam started selling itself.

One strength of The Missing Cryptoqueen is Bartlett’s ability to blend gripping storytelling with the rather dry regulatory context and legalese necessary to understand how Ignatova pulled this off and just how brazen the endeavor was. For example, the OneCoin team knew that if their pyramid sold coins directly, they could easily run afoul of securities regulations, as they would essentially be paying commissions on stock trading. Instead, the team sold “educational materials” about OneCoin that were tied to “free coins.” A “starter pack” cost €100, or $138 USD, for a PDF and around 200 coins; a “Tycoon Trader” package would run you $6,900 for five PDFs and 28,000 coins.

If you sold Tycoon Trader packages to other marks, you would get a cut of any sales they made after that; this is your “downline,” and it’s where the real money is made in multilevel marketing schemes. The idea is to expand your downline as much as possible. In practice, this means cajoling friends and family members into the pyramid. The top tiny percent, called the “Crown Diamonds,” made off with millions in downline commissions. The vast majority made chicken feed, but there was always the promise that OneCoin would “go public”—be traded on a major exchange like Binance—and get a ticket “to the moon.”

The currency itself was a big fake. Purchasers would see coins in their wallet after purchasing an educational package. But there was no blockchain there at all, just a database that would credit and debit as requested—at least usually. The only exchange on which OneCoin could be traded, xcoinx, was secretly owned by OneCoin, which manipulated the price. Another pressure valve was Dealshaker, supposedly an Amazon killer, where OneCoin promoters could sell tchotchkes for their fake coins. The websites were amateurish and hardly functional, with misspelled FAQ pages.

On paper, people were millionaires. Xcoinx would limit sales, set the price, and arbitrarily double the coins to make people feel like they were rich. They earnestly believed they could retire to a yacht one day. This hope was enough to keep dupes holding the bag for far too long; as Bartlett wrote his book, some stubborn devotees were still holding and trading OneCoin. Meanwhile, Ignatova and her co-conspirators treated the OneCoin bank accounts like personal piggy banks, buying multimillion-dollar homes across the world and investing in sketchy projects however they saw fit.

Ignatova and her cronies never cared about OneCoin. They didn’t care about the ideas they threw around in public, like “banking the world’s poor” or the “financial revolution” or even killing bitcoin. They wanted to make money and get out, and Bartlett marshals the panicked communications that show Ignatova scrambling for an exit while the international financial surveillance system crashed down onto her billion-dollar fraud. OneCoin kept chugging to the bitter end, running on fumes and a phantom staff well after Ignatova disappeared somewhere within Greece in 2017. Bartlett’s best guess is that she is living in international waters in the Mediterranean Sea.

This book is packed with scurrilous subplots and tacky characters, and it offers an illuminating look at the world of international finance and the many traps that eventually did OneCoin in. It comes at an opportune time, given the public’s ample appetite these days for a good scam story. Hulu’s The Dropout and Apple TV’S WeCrashed got loud buzz by dramatizing how narcissists can exploit techno-optimism and plain old human greed. The former covers Elizabeth Holmes and her bloodsucking Theranos scam, while the latter tackles WeWork, Adam and Rebekah Neumann’s kombucha-soaked and Vision Fund-ed office cult.

Perhaps we will see a similar streamed or televised treatment of “Dr. Ruja,” as she insisted on being called, and the black hole of the OneCoin world. Like Holmes and the Neumanns, she makes a great villain. But Ignatova is different, and arguably more sinister, than those better-known charlatans.

Theranos and WeWork humiliated elites who poured in their money and reputations based on the charm and visions of their charismatic founders. These companies certainly hurt many average people along the way; WeWork exploited its employees, while Theranos exposed patients to possibly deadly health misinformation. But in terms of investment, it was mostly the well-to-do who were on the hook.

With OneCoin, by contrast, Ignatova and her team of lawyers, moneymen, brand consultants, and multilevel marketing maestros shamelessly targeted and stole from average people—in many cases, some of the world’s most vulnerable. Even Ignatova’s brother Konstantin, who ran the scam after Ruja disappeared, felt a twinge of guilt as he hawked OneCoin packages to unsuspecting farmers in Mbarara, Uganda.

The complication with multilevel marketing frauds and Ponzi schemes is that the victims are often accomplices. They are so blinded by promises of riches that they harangue loved ones to join, using the same lies that worked on them. This can encourage people to double down on their beliefs, because admitting that you were suckered into a fraud also means admitting that you lured your family with the same false promises.

The Missing Cryptoqueen is a fascinating look into the schematics and psychology of a scam. Let’s hope more people learn about the OneCoin debacle and the woman behind it. Everyday people need to protect themselves against such predation, whether or not Ignatova ever sees her day in court.