The missing crypto queen is a story about Ruja Ignatova, who gave herself this title while convincing people to invest in her new cryptocurrency. This cryptocurrency was called OneCoin and was said to rival that of Bitcoin. This was during a time when Bitcoin saw a significant rise in value, and with a lot of buzz surrounding the cryptocurrency market, Ignatova was able to convince people to invest billions in her project. Likely due to the success that the cryptocurrency saw in the last decade. You can see the last decade of Bitcoin in the below infographic.
As this crypto queen began to convince investors that OneCoin was a “Bitcoin Killer” and that as OneCoin grows “nobody will speak about Bitcoin anymore!” this promotion of the currency during a time of exciting investment opportunities led many into losing their life savings, with people in all areas of the globe making investments. Documents leaked to the BBC revealed that the British threw nearly €30 million into OneCoin during the first half of 2016.
How does cryptocurrency work?
Cryptocurrency is digital money that can be transferred from one e-wallet to another. In the past, the concept of this digital currency has brought challenges due to the risk of “Double Spending” from occurring. The “Double Spending” problem was a major concern for the concept of digital currency, as unlike physical, traditional forms of money that are kept track of by financial institutions, digital currency has the potential to be replicated, meaning users could spend it twice. Additionally, enforcing any regulation, even the likes of GDPR is incredibly difficult with cryptocurrencies due to their anonymised nature.
Bitcoin was the first cryptocurrency that is still used today. A paper detailing plans for the cryptocurrency and how it would work were published online in 2008. This paper was published under the name Satoshi Nakamoto, who is thought to be the founder, or founders, of Bitcoin.
The plans for Bitcoin mapped out a cryptocurrency that was regulated through a decentralised system, as opposed to the centralised systems traditional money (e.g. Pound Sterling) are monitored by (financial institutions). This decentralised system worked due to its blockchain technology, which served as a public database to monitor transactions and make sure people were not duplicating their Bitcoin tokens.
Why did OneCoin not work?
While the crypto queen was shouting from the rooftops that OneCoin would be ultimate Bitcoin rival, in October 2016, blockchain expert Bjorn Bjercke was offered a job with the company. The role was chief technical officer, with an impressive salary of around £250,000 in addition to a new car and apartment.
This job offer included building a blockchain for the cryptocurrency, which at the time they currently did not have. Bjercke did not take the job. What this showed was that OneCoin did not have a legitimate system put in place to monitor or validate its currency.
Instead, it was discovered that OneCoin had an SQL Server with a database, which could not hold as a legitimate base for a cryptocurrency, the manager of this being able to change it as and when they pleased. Therefore, while the numbers were rising for OneCoin’s currency, it became clear this was not the true value of the coins and was rather an employee typing in fake numbers.
The crypto queen disappears
While OneCoin continued to gain investors from all over the world, the ability to exchange the cryptocurrency into cash was delayed. Investors began to grow concerned, and in October 2017, the crypto queen herself went missing.
To this day Ruja Ignatova has not been found, FBI records showing she flew to Athens and then went off the radar entirely. The BBC has reported on documents that were leaked to them, claiming €4 billion had been put in OneCoin from August 2014 to March 2017. More statistics are available by checking out Betway’s Blog.