Blockchain: Is it a hoax?  101

Crypto fraud

There have been multiple frauds within the cryptocurrency market, but the

following is one of the biggest ones to date from a monetary as well as ethi-

cal perspective.

It is a real story about a person known as Ruja Ignatova, who is called the

Cryptoqueen. She marketed that she had invented a cryptocurrency to rival

Bitcoin and persuaded investors to invest billions. The cryptocurrency was

called OneCoin. She disappeared one day, and no one knows where she’s

hiding (as of the time of writing on 16 October 2021).

In early June 2016, a 36-year-old businesswoman called Dr Ruja

Ignatova walked on stage at Wembley Arena in front of thousands

of adoring fans. She was dressed, as usual, in an expensive ballgown,

wearing long diamond earrings and bright red lipstick.

She told the cheering crowd that OneCoin was on course to become

the world’s biggest cryptocurrency ‘for everyone to make payments

everywhere’. [emphasis added] – BBC News (https://www.bbc.co.uk/

news/stories-50435014)

People all over the world were already investing their savings into OneCoin

as they were hoping to be part of the revolution and become mega rich.

The conclusion from cryptocurrency enthusiasts was that there was no

blockchain behind OneCoin but a mere standard SQL server database and a

website as a front end. The rising number on the OneCoin website were mean-

ingless as they were numbers typed into a computer by a OneCoin employee.

Investors were growing more and more concerned by the delaying of the

long-promised exchange that would allow OneCoin to be turned into cash.

All these worries and concerns were supposed to be clarified at a large gath-

ering of European OneCoin promoters in Lisbon, Portugal in October 2017.

Dr Ignatova did not turn up to the gathering. As per the FBI, she had gone

underground 2 weeks after her Lisbon no-show. She boarded a Ryanair

flight from Sofia to Athens on 25 October 2017. That was the last time

anyone saw or heard from Dr Ignatova.

Figure 4.2 shows the picture of Dr Ignatova.

In summary, Dr Ignatova identified several weak spots in society and

especially the digital revolution, whereby enough people are either desper-

ate or greedy enough to take bets on OneCoin to become rich quickly. The

most important point was that she took advantage of the timing and con-

tradictory information online about cryptocurrency. She knew by the time

lawmakers, police, media and people realise that it was a fraud, she would

be gone, along with the money.

As per the BBC News (https://www.bbc.co.uk/news/stories-50435014), apart

from the above-mentioned highly visible cryptocurrency fraud, there have