By Adam Tarlowski.
Cryptocurrencies have long been associated with scams and OneCoin, the largest crypto scam to date, is still crowned king.
Beginning in late 2014, and lasting through mid-2016, OneCoin was a textbook cryptocurrency Ponzi scheme. Tokens were sold to newcomers, funneling profit to a select few at the top of the pyramid. Ruja Ignatova, the charismatic founder, touted financial opportunity, promoting the token to duped investors. The scheme revolved around purchases of “educational packages,” where buyers then earned OneCoin. The coin derived its value solely from management decisions at the top of the scheme and was extremely difficult to trade in for real money once acquired. It is estimated that over three million people participated in the scam and over four billion dollars were stolen once it came crashing down and labeled as a fraud. All said and done, the scam taught several valuable lessons that carry weight to this day.
At the heart of the scheme was a wild family affair of greed, backstabbing and deceit. Unlike the crypto space today, as OneCoin began its ascent to power, few educated public voices existed to dismantle the scam. Promises of wealth spread like wildfire, as complicated terms like “cryptocurrency” and “blockchain” were thrown around to uninformed investors looking to make money. Today, more people are familiar with these terms. Still, a major portion of Earth’s 7.6 billion people are unequipped to notice what is and isn’t legit in the crypto sector. These destructive schemes are still a real threat worth preventing to protect for our neighbors and the public image of crypto.
Bitcoiners and skeptics may have considered OneCoin a fraud at first glance, but three million people did not. The magnitude of the scheme reveals that the complexities and nascency of this space render the general population vulnerable to its fraudulent activity. OneCoin also revealed that this space, like any other sector, isn’t perfect and that scams do exist. While OneCoin may have had all the telltale signs of a Ponzi scheme, many questionable coins that have boomed today aren’t as cut and dry. Chasing the next 100x price pump on a low market cap coin may not lead you into a cult-like crypto scheme, but it could leave you in the same place OneCoin did – broke and confused. Hopefully, today more people in the know can do their part to inform others that – if it is seems good to be true, then it probably is.