Three key crypto lessons from the OneCoin scam. The story of the world’s most renowned, and notorious, cryptocurrency Ponzi scheme has numerous lessons that can be use to help investors identify – and avoid – scams.
Key crypto lessons scams abound in the world of cryptocurrency. However, OneCoin is widely consider to be the most successful cryptocurrency scam in history. In the three years between 2014 and 2016, the initiative received $ 4 billion in funding from investors from all across the world. Also, despite the fact that it was never even on the list on a stock exchange, it was able to attract funds from practically every country you could think of.
Ruja Ignatova, or “Dr. Ruja,” the company’s co-founder, vanished without a trace in 2017 after spending millions of dollars from her investors on luxurious apartments and other assets. Sebastian Greenwood, one of the company’s co-founders, sentence to prison for wire fraud in the United States. And Dr. Ruja’s brother Konstantin, who went on to become OneCoin’s CEO, also sentence to prison.
Years later, law enforcement agencies around the world are still on the hunt for OneCoin executives. It could take them decades to track down every single one of them.
However, this fascinating narrative – which is going to be made into a blockbuster Hollywood film starring Kate Winslet as Dr. Ruja – contains some crucial implications for crypto investors who wish to understand how to detect a scam and how to avoid falling victim to one.
If it looks like an MLM Scam, it probably is
If it looks like an MLM Scam, it probably is. The cryptocurrency market is not a pyramid scheme, contrary to what some people believe. Last month, a contributor to the Financial Times opined that “labeling Bitcoin a Ponzi scheme” is “probably being too generous.” It is important to note that cryptocurrencies are the product of blockchains. Which are immutable and uneditable in nature – due to the fact that they do not exist on a single database. But rather on a share network that continues to exist even if an individual node is taken offline – as opposed to traditional financial instruments.
Cryptocurrencies such as blockchains are extremely powerful financial tools. They are possibly the ultimate accounting tool, given that anyone anywhere in the world with internet connection. It may analyze all transactions that have taken place on them at any one moment. The number of tokens owns by an individual wallet may be determine, as can the date and location of currencies that have left a wallet. With the exception of privacy coins such as Monero, this information is available.
MLM scams operate in the shadows, utilizing faked documents or inaccessible ledgers. This is much like OneCoin, which kept much of its accounting a secret and didn’t even have a blockchain.
As a result, it appears that the sum total of its accounting carries out on a collection of PCs in a small office in Sofia. Bulgaria, that was abruptly evacuated one day in 2019.