Explained | Who is Ruja Ignatova and what is the OneCoin crypto fraud?

Ruja Ignatova is the latest entrant to the FBI’s Ten Most Wanted Fugitive List. She is alleged to have devised a crypto-based fraud that siphoned $4 billion out of victims based in Europe, North America, Asia, Africa and Asia before absconding.

The story so far: On June 30, the Federal Bureau of Investigation (FBI) added Bulgarian-born Ruja Ignatova to its ‘Ten Most Wanted Fugitive List’ – currently the only woman on the list. Founder of the Bulgaria-based OneCoin Ltd that marketed a purported cryptocurrency, she is accused of devising a large-scale financial fraud that siphoned more than $4 billion out of victims based in Europe, Africa, Asia and North America. The company has been found guilty of manipulating the demand and supply of the purported cryptocurrency—OneCoin—and making false public representations to lure victims into purchasing ‘OneCoin packages’ to mine the cryptocurrency. The accused capitalised on the crypto buzz prevailing during the time to draw new investors. New York Country District Attorney Cyrus Vance Jr remarked in 2019 that the accused executed “an old-school pyramid scheme on a new-school platform.” 

Ms Ignatova spearheaded the company until October 2017, when she allegedly absconded. As per the FBI, she travelled from Sofia (Bulgaria) to Athens (Greece) before disappearing from public life. It was around this time that U.S. District Court for Southern District of New York had issued a federal warrant for her arrest. In February 2018, a superseding indictment charged Ms Ignatova for wire fraud, money laundering and securities fraud.  

The FBI has announced a bounty of up to $100,000 for any information that will help with her arrest.  

Dressed in a red gown and expensive diamond jewellery, the ‘Cryptoqueen’ as she was popularly known, told a packed house in London’s Wembley in June 2016, “We will be the biggest out there, we will write history and the cryptocurrency community would have to rewrite philosophy.” This was preceded by an assertion that in another two years, nobody would speak of Bitcoin anymore – challenging directly the might of the world’s oldest cryptocurrency. 

The Oxford-educated founder, also a Ph.D. in Law, had previously been an associate partner at McKinsey & Company. Her resume, lavish lifestyle and flamboyant marketing strategies particularly drew investors and potential customers to OneCoin. As per The Wall Street Journal, the company made so much money that they hardly knew where to put it. They stacked it in cash in offices and apartments in Bulgaria, Hong Kong, Dubai and South Korea; bought thoroughbred racehorses and lent about $30 million to buy an oil field in Madagascar. The company generated €3.35 billion in sales between fourth quarter of 2014 and third quarter of 2016, with traders from China accounting for about 60 per cent of the overall revenue, Europe 18 per cent, Australia 15 per cent and North America and Caribbean a combined 3%. 

She professed her ambition to create the world’s number one cryptocurrency that would be easy to use, available to everyone, could facilitate payments everywhere and acquire the highest market capitalisation. According to her, Bitcoin was not a “mass market cryptocurrency”. Ms Ignatova claimed to focus on educating consumers about cryptocurrencies .  

Ms Ignatova founded OneCoin Ltd in 2014 and was at its helm until October 2017 before allegedly absconding. She is believed to have received a tip-off about her possible prosecution and arrest from sources in law enforcement – prompting her to decamp. Her brother, Konstantin Ignatov, who spearheaded the company after she left, was arrested in March 2019 at the Los Angeles airport. He pleaded guilty to charges of fraud and money laundering, and now awaits his sentencing. As per his testimony, the founder had suspected that her boyfriend was cooperating with law enforcement. Once the suspicion was confirmed, she flew to Athens with only her purse and a security guard, The  Wall Street Journal reported. The FBI suggested that Ms Ignatova may have had plastic surgery or otherwise altered her appearance.