It’s no wonder folks steer clear of cryptocurrencies when scammers like the “missing crypto queen” turn up, sell snake oil, then disappear. Today, with so much regulation across continents, one would think that this kind of scam could never happen. But it has, and victims have lost their hard earned cash and savings.
Imagine the scene: a big event at a posh hotel or well known fancy gig. You’ve seen an advert in a newspaper telling you that the hottest investment in town is coming. She’s a doctor with a super high intelligence quotient who is currently making her investors shed loads of bread. You do a bit of digging and find out that Dr Ruja Ignavota is an Oxford-educated serial entrepreneur. It’s all starting to look very credible.
Her new invention – OneCoin – is going hell for leather, a rip-roaring success that is taking the world by storm. Her disciples and advocates are standing on stage in awe of her, now that they have ‘made’ so much money on their initial investments. It’s showtime and the fear of missing out is just palpable. It’s now or never and she’s convinced you to transfer your cash into OneCoin, her new digital currency.
Investments into thin air
Now you’re part of the OneCoin cult. You wake up every morning and watch your ‘investment’ rise. You flick to the OneCoin bookmark every few hours on your mobile phone. Then last thing at night, yep, it’s all looking good. You tell your friends and family about this once in a lifetime opportunity to get in fast before the whole world does. Still your ‘investment’ goes up and up. But, unlike proper investments, your money is invested in thin air.
The story of OneCoin is one that I still cannot fathom. How did this nobody suddenly become a crypto guru conning people out of their cash. And where is she now?
Cryptocurrency is a dangerous beast. Bitcoin appears to be the ‘safest’ bet. But, I wouldn’t advise anyone to invest in it. Albeit it has some form of pedigree, but no fundamentals. Only this week Bobby Lee, a massive crypto bull stated that he believes Bitcoin will indeed surpass gold as the best place to invest cash in the future. Lee, who is launching a new cryptocurrency wallet for the less technically minded, has plotted that Bitcoin will hit $1m (£780,000) after two more Bitcoin bubbles. The language itself is scary – however, in using Bitcoin via Coinbase or Gemini, there is a piece of code that one actually owns on the blockchain.
Unfortunately, Dr Ignavota scammed OneCoin investors with no sign of a blockchain anywhere. There are heartbreaking stories of UK citizens losing big time as a result of investing in OneCoin. By March 2017, more than £3.5bn had been invested in the OneCoin system from 175 countries. It is thought around £100m of that came from the UK. That is a staggering amount of cash, leading to questions of how this could happen on such a scale. But the cult-like magnetism and selling tactics of OneCoin guru Ignavota meant that people were duped. We’ve seen it all before and will no doubt see it again. But with the advent of mind blowing tech, it could become even more prevalent.
It’s easy to rig up a credible website with logins, secure-looking banking software and fabulous graphics to hook you in. Some clever social media and a front man or woman and there is the structure of an investment vehicle. Oh, and don’t forget the videos of disciples who have also invested and wax lyrical. That is just how quickly and effectively scammers can build an audience and cash piles to feed the frenzy. Of course, the investments are financial chimeras rigged to look real.
Dr Ignatova will resurface somewhere, but the damage has been done. I just wonder if the Bitcoin enthusiasts will suffer the same fate.
- Jim Duffy MBE, Create Special.