OneCoin co-founder pleads guilty to $4 billion fraud

"What is OneCoin?" asks the narrator of a YouTube video. "Millions of people around the world are mining OneCoin today. The reason? It's a platform for innovation that changes the financial industry." Karl Sebastian Greenwood, co-founder of sham "Bitcoin-killer" OneCoin, offered a different interpretation of the supposed …

[Anonymous Coward]

"In fact, OneCoins were entirely worthless."

Well, they were at least on par with Bitcoin, if not a Bitcoin killer ...

[sreynolds]

Re: "In fact, OneCoins were entirely worthless."

Both statements can be true. If onecoin == bitcon and if onecoin == 0 therefore bitcoin == wothless.

[AVee]

...and run.

Turns out talking the money was easy. But it seems only Ignatova got the second part right. This might suggest she did some proper planning for the running part. You never know, but I doubt they will ever find her.

[KittenHuffer]

Re: ...and run.

I thought I had seen a theory that she is currently pushing up daisies, and that whomever did the dirty deed is currently enjoying the benefits of her nefarious labour.

-------> Maybe what her 'Wanted' poster should look like!

[Azamino]

Re: ...and run.

Having her pursuers quit their hunt on the assumption that she is dead will suit the bent doctor very nicely.

[BOFH in Training]

Re: ...and run.

There have been rumouring going around that she may have been "disappeared" by some very bad people she worked with as well.

And in our current connected world, it will be difficult to always run and watch over your shoulder for the rest of your lfe.

Although Jho Low of the Malaysian 1MDB scandal seems to be managing it so far as well.

[Frank Bitterlich]

Re: ...and run.

... as is Jan Marsalek of Wirecard fame. Looks like having some pocket money does help.

[First Light]

Re: ...and run.

As is Do Kwon of Terra. And even doing podcasts in "hiding", supposedly in Serbia.

https://www.youtube.com/watch?v=RgYSJVC7Ps8

https://edition.cnn.com/2022/12/13/business/south-korea-do-kwon-serbia-intl-hnk/index.html

[BOFH in Training]

Re: ...and run.

No matter how much money you have, you will never have peace of mind - always wondering if you will be caught / your host will decide to hand you over for political / other reasons, etc.

And you can't afford to be seen publicly or all it takes is just some random pic taken by a phone and you will be plastered all over the news.

Maybe extensive public surgery may help I guess, but still, no peace of mind.

[Anonymous Coward]

Re: ...and run.

Depends on how extensive the surgery is. A quick flight to Thailand and you can have bits added on or removed, and suddenly your a bloke instead of a sheila, or vice versa. Depends on how strong the freedom drive is.

[cookieMonster]

Ouch

first option on a list of possible exit strategies is said to have been, "Take the money and run and blame someone else for this…"

I bet he never thought he was the “someone else”

[Pascal Monett]

"As Ignatova allegedly put it in an email to Greenwood"

Why did this stuff need to be put in writing ? Didn't the two shysters know what they were doing, or was the lady giving an ABC to a newbie ?

It baffles me how criminals seem to universally love documenting their crimes to one another. Oh, look how smart we are, we're pulling this scam on stupid people with money. Ha Ha, life is fun, isn't it ?

Sure, real fun. Right up until the prosecution pulls out that email destroying your defense based on "not my fault, Your Honor, I didn't know this was going on".

In any case, the smart one obviously has the skirt in this case. Though I'm willing to bet she's blonde now.

[Sorry that handle is already taken.]

Re: "As Ignatova allegedly put it in an email to Greenwood"

Much of the speculation about Ignatova's whereabouts suggests she's gone underground... in a very literal sense. She ripped off people who were wealthy and shady in equal measure, after all.

[Long John Silver]

Re: "As Ignatova allegedly put it in an email to Greenwood"

I doubt those wealthy by dint of personal effort are easily conned into 'get rich quick schemes'. However, people with inherited wealth might more easily be taken in.

[An_Old_Dog]

Re: "As Ignatova allegedly put it in an email to Greenwood"

At a certain level of wealth, a rich victim may well decide, "Fuck the money [I was scammed out of]. I want revenge."

[Anonymous Coward]

Another criminal plot by those that watch too much TV

As a result, I'm not going to be surprised if she turns up alive someplace in a few years, probably busted for doing something else stupid.

This has all the "dim bulbs trying to be clever" hallmarks of a Cohen Brothers plot, and will probably turn out the same. They made too many obvious mistakes in their scam to succeed in the getaway. And the long game favors the cops. They have to be right once to bust you, and every mistake you ever make for the rest of your life give them another roll of the dice.

And nothing says clever idiot quite like "fake my own death". Or you know, maybe she went out burn after reading style, with a dumb look on her face, but I'll hold of till they find a body to consider the ending to this pathetic tale closed.

[Sorry that handle is already taken.]

Re: Another criminal plot by those that watch too much TV

The existence of an identifiable body would definitely send a stronger message, it's true.

[gnasher729]

Re: "As Ignatova allegedly put it in an email to Greenwood"

If they are shady enough, they don’t even have to be wealthy. Say some unscrupulous drug dealer who doesn’t mind killing kids by selling them drugs, who has saved low six digits and lost 50 grand. If he has a chance, he’d kill for that. And with the number of people with a motive, he’d get away with it.

[Flocke Kroes]

Re: "As Ignatova allegedly put it in an email to Greenwood"

Perhaps there is someone we do not know about who has taken the money, run away and faked some emails to blame someone else.

[Jedit]

"Why did this stuff need to be put in writing?"

The fastest way to get caught in a fraud is inconsistency. A written record of what you're doing is risky if you are caught, but if you know exactly what lies you're meant to be telling it becomes less likely that you will be caught. The real stupidity here was not having a means of destroying that record should an exit be required.

[BOFH in Training]

Re: "As Ignatova allegedly put it in an email to Greenwood"

Best part is, she is a trained lawyer.With a PHD to boot. So she should know better then the average person on what can be used against her.

LOL

[Anonymous Coward]

"The Missing Cryptoqueen" is still available from the BBC

(a couple of updates were added a couple of months ago)

[JamesTGrant]

Enjoyable and interesting if rather over egged

I thought it was interesting and I learned a lot from in. Some of the presentation style was not my cup of tea but when they focused on the story it was very absorbing . An absolute tragedy that anyone would be so hoodwinked to place their trust and financial future in something that was (at least to anyone in the tech or financial sector) so obviously a scam that exploited the already pretty desperate. Maybe it was so obviously a scan that it was ignored for so long.

On a car drive from Bournemouth to Birmingham and back I managed to guzzle most of it! Don’t remember it mentioning Greenwood though.

Very interesting, one of those; ‘just how do you get away with it?’ Maybe she has, or not…

[Howard Sway]

We are not mining actually – but telling people shit

What difference does it make? Burning millions in real money on electricity to produce meaningless strings of bits and claiming that it "creates value" is also telling people shit.

[spireite]

"an MLM scheme"

Defined the crypto market in one easy bitesize chunk.

Switch them all off.

[Jon 37]

Re: "an MLM scheme"

No, most crypto is not an MLM. It's a Ponzi scheme.

[nintendoeats]

Re: "an MLM scheme"

MLMs are a ponzi scheme, with a thin venere of actual product on top to hide the fact that the whole thing is rotting from the bottom up.

[Anonymous Coward]

Sigh

MLM is what people that run pyramid schemes call their pyramid schemes to convince you they are not in fact pyramid schemes. Depending on your jurisdiction they may be technically NOT illegal(at least structurally). They are however build to screw over anyone who didn't start it.

Ponzi schemes use money from one mark to hook the next mark, and money from new marks to keep marks at the beginning from noticing right away. The core of the play is to drive expansion as fast as possible, so the stream of money from the new marks is much bigger than is being paid out. Occasionally people slip into executing Ponzi schemes to attempt to conceal losses, usually from high risk speculation.

You can combine both but the fraud classes are separate, and as I said, it some places it's possible to run a legal but exploitative pyramid scheme indefinitely as "MLM", as long as you can find a stream of suckers.

The problem with both is the math doesn't favor stability, so the play is usually to make the bubble as big as possible and then disappear as it pops. But there are plenty of MLM/Pyramids these days that aren't actually Ponzi's(not out of any sense of decency, but why give suckers money that they can keep, and why add fraud charges with actual teeth.) Instead, you waste people lives trying to sell over hyped garbage to to their friends and take a cut not only from their sales, but the sales of everyone they recruit. Since you never give the suckers any money back, you duck the Ponzi charges. Slower, and by no means likely to take off, but as Herbylife proved, lucrative and harder to stamp out than a cockroach.

[nintendoeats]

Re: Sigh

Yes, you are right, I forgot about the difference between a pyramid scheme and a ponzi scheme.

[Hans Neeson-Bumpsadese]

A while back the BBC ran an excellent Podcast called "The Missing Crypto Queen", which is well worth a listen - in particular for interviews with early adopters who bough in heavily, convinced their friends & family to do the same, and defended the cult, but who have now seen the light. The investigative journalists behind it are still on the case and there are occasional updates as they continue to track Dr Ruja.

[Flightmode]

Absolutely worth a listen!

The part where host Jamie Bartlett visits a small community in Africa (can't remember which country it was now) where a bunch of villagers had been scammed into "investing" was equally heart- and gut-wrenching. The younger guy he was talking had been in on the scam and had defrauded his parents as well as their friends and neighbours - and hadn't had the cojones to tell them about it. When he casually said to Bartlett, just before he got to interview the guys mom, that "Oh, yeah, they think you're here to give them their money."...

[Anonymous Coward]

"(Dr. Ruja Ignatova – she has a law degree)"

So not a Dr. then... just a graduate... unless its a PhD in law?

[Sceptic Tank]

Wonkypedia seems to indicate that the PhD is legit. This is Dr Eeevil demanding $4 Billion for real.

[TDog]

In fiat currency

I saw what you did there.

[lglethal]

Re: In fiat currency

In fiat currency? So long as it's in 500's...

[David 132]

Re: In fiat currency

Uno what, you stole the joke I was about to make. Bravo.

[Long John Silver]

What kind of people were targeted by this scam?

Does anyone know the nature of the victims and anything about the range of individual losses and the mid-point (median)?

Was recruitment of victims primarily through personal contact by other members of the pyramid scheme?

Had the perpetrators devised a true blockchain-based coin along similar lines to Bitcoin and mined a large initial tranche of coins, might they have got away with duping people into believing the coins had worth with potential for investment growth? Their overall 'take' would have been much less, but their profile would be lower because in the initial days of Bitcoin frenzy many alternatives were created.

[jvf]

Re: What kind of people were targeted by this scam?

In my metaverse, the cops are allowed to ticket people for being stupid. Looks like we’ve got 3 million new scofflaws waiting to be served

[General Purpose]

Re: What kind of people were targeted by this scam?

The BBC podcasts might not give a median figure but otherwise are very good on the range of victims and how they were recruited, and on the big UK law firm that protected her from bad publicity. The updates after the main series include the likelihood she's still alive and was receiving information from within Europol about their investigations.

[First Light]

So, no mining

Does that make them the first zero-carbon crypto? :-)

[Anonymous Coward]

Sadly no

They just wasted the CPU time doing literally nothing. Much easier than actual crypto, but just as wasteful thermodynamically.

And all crypto is "Zero Carbon" unless you work it out by hand on a 70s era stationary tablet.

[DS999]

Is there even one crypto company

That wasn't a scam from day one?

[Anonymous Coward]

Dozens of them

But that dosen't make them a good investment, an efficient payment processing network, or in some juridictions legal.

You can tell by reading the white papers, looking at the founders, and checking the math.

If you can't or don't want to put the work in, caveat emptor. In reality, you will mostly be missing out on opportunities to lose money, unless you have a knack for hitting the exit door before everyone else.

The yield on the legitimate and non-speculation based Cryptocurrency market is pretty small by comparison, as it's mostly transaction fees, which in the honest protocols are pretty small, and held down algorithmically. So in a functioning market, most of the value is literally in cutting out fees from companies like MC and Visa that are screwing you harder on those fees. The only way for that to scale up real money is for it to take over POS traffic from the credit card networks, and is a fair protocol, the fees will be spread around to the point where no one is getting super rich off them. Noting wrong with that but it isn't sexy for the sort of investors that "Web 3" attracts like flies.

[DS999]

Re: Dozens of them

I'm willing to bet you would have claimed one of the ones that's already gone belly up as one of those "dozens", which you choose not to name because you know it isn't likely to age well.

I never saw anyone claim that SBF was a scammer until he was a scammer. He was seen as one of the ones helping out the industry by extending credit to exchanges that were having problems. But I'm sure you'll claim you knew it was a crook all along, but be unable to provide any proof you thought so further back than a month ago.

[gnasher729]

Re: Is there even one crypto company

Bitcoin wasn’t a scam _from day one_. It started as a bit of fun, then turned into an ecological and financial disaster.

[DS999]

Re: Is there even one crypto company

OK fine, bitcoin and ether were not created as scams, and dogecoin was only created as a gag. Everything else was a scam from day one, or day two at most.

[teknopaul]

Code is law

Decentralised,

unhackable system,

no one has ever broken the math.

Lolz

Seems no one had, ever, even so much as connected to this network.

[Anonymous Coward]

Approach

In 2018 I was approached by someone I knew vaguely at my morning coffee cafe and had to listen as they waxed lyrical about OneCoin and how I should invest.

After approx 1 or 2 minutes on Google it was evident that it was total BS.

When I pointed this out they got very defensive and assured me it was legit as they had been to a big OneCoin conference and it was definitely real, presumably based on the amount of investors money they had spent on convincing presentations etc.

On subsequent occasions this individual tried again to get me to invest until I had to basically tell him he was an idiot and to kiss his money goodbye.

Strangely, after the scan was exposed, he still hung onto the belief that it would all come right in the end.

Subsequently to his money disappearing for ever he avoided me... despite my inquiries as to how his investment was doing...