Cryptocurrencies have not yet been devoid of its reputation of being unsafe, and here we have a mind-boggling scam!
Ruja Ignatova, in 2016 at London, claimed that she has a product, a cryptocurrency that will be the “bitcoin killer.” The figures presented by her were rather alluring. What then followed is a case like never before. After a year in 2017, Ignatova was charged with fraud and money laundering, whose arrest is yet to be made. A scam worth a whopping $4 billion is what is arched in the history of duping in the crypto market.
What led to the successful pull off of such a dubious master plan? The methods employed by OneCoin Ltd to attract investors are crude. OneCoin adopted three key processes through which they could attract investments from various countries.
- Multi-Level-Marketing (MLM)
MLM is the method where a commission is cut by agents who sell a product to their family and friends who then further sell them to others with a certain commission and referral rewards. It is also called the pyramid scheme. The product here was the fake coins, and the agents were various MLM experts, all of whom had their cuts. The marketing was operational all around the globe.
They claimed that they mined the coins through a centralized network through a personalized and private blockchain. Adding to that, they also stated that unlike bitcoins, OneCoin is backed by KYC and is much more secured.
- Fake Representation
A website or tracker sorts kept showing that there were coins transferred to the ones who made the investments. The prices also kept showing to soar higher. Their organizers “programmed” the coins to show a jump from €0.50 ($0.56) to €29.95 ($33.68) approx.
- Prima Facie
The website is till date intact with data and a YouTube channel. It claimed that it was an innovation that will change the financial system. Tall claims backed with representations added to the whole furnishing of the lies.
When the big scam was exposed, investors from across the globe lost millions who invested with the hope that they would earn double returns. Much contrary to financial relief, to date, there is no sign or chance of any recovery. While few of the patrons of the scam are facing the legal heat, Ruja Ignatova is still on the run with OneCoin being active. This has been a reason for major concern in the cryptocurrency circuit for possible incidents in the future.