OneCoin, three scams

When Ruja Ignatova became aware of Bitcoin, in 2011, she was on the lookout for a quick way to get rich. A small-time entrepreneur who had moved from strategy consultancy into grooming and fashion, she’d stay up half the night reading books about how to make a fortune. Cryptocurrencies at first seemed just another silly craze, not a plausible opportunity. But the more she thought about them, the more the ambitious thirty-something saw their potential to revolutionize payments and lending, in her native Bulgaria and far beyond. Doomsayers warning that the new threats to create a shadow banking system and derange conventional markets. Yet to their fans these digital assets, outside the control of governments and central banks, were a means of eliminating intermediaries from transactions – and an exquisite expression of technological liberalism.

As Jamie Bartlett explains in his pacy account of Ignatova’s ascent and ultimate fall, her vision was simple: she would integrate cryptocurrency into the existing financial landscape. Grasping that the main drawback of Bitcoin was its being complicated to use and store, in 2014 she unveiled an accessible alternative. This was OneCoin, billed as a common-sense antidote to the general brashness of crypto – “the people’s coin”, she declared while in Malaysia to publicize it.

That trip was one of many promotional junkets, and Ignatova was their star. Though in private she spoke of her familiarity with the “grey zones” of technology legislation, publicly she projected an air of regal hauteur: all flowing gowns, diamond earrings and dramatic entrances. To raise her profile she bought ad space in the Bulgarian edition of Forbes, which she then repurposed to make it look as if she had been on the magazine’s cover. Investors were persuaded of her seriousness by statements about her blue-chip academic and professional background (a master’s from Oxford, a spell at the consulting firm McKinsey). She had no trouble finding boosters – Bartlett cites one lickspittle who claimed that “Ruja is so amazing she bends entire mathematical principles”.

OneCoin soon attracted investors from across the globe, especially China. In the US a trio of sales reps hyped it as a divine intervention in the kingdom of Mammon, while a Finnish evangelist, whose CV included a stint on TV’s Gladiators, would begin his pitch by yelling: “Do you know why I wear shades? It’s because the future looks so bright!” But Ignatova’s brainchild was never what its enthusiasts imagined. An essential feature of any cryptocurrency is its blockchain, a secure, decentralized electronic ledger of every transaction – visible to all users, who validate each record added to it. OneCoin was launched without a blockchain. In the autumn of 2016 the company attempted to hire a Norwegian expert, Bjørn Bjercke, to remedy this far from trivial omission. Sizing up the role, he was bewildered: a cryptocurrency with no blockchain was like a car without an engine.

At that point outsiders had scant understanding of the company’s mechanics, and the cult kept gathering momentum. There were dissenting voices: as early as February 2016, Britain’s Daily Mirror OneCoin denominated as “virtually worthless” – “all fur coat and no knickers”. Yet only in the autumn of 2017, following an FBI probe into Ignatova’s sometime lover Gilbert Armenta, did it become clear to investors that, as Bartlett neatly puts it, OneCoin was “three different scams rolled into one”: a Ponzi scheme, an extreme example of “shark-like” multilevel marketing and a fake cryptocurrency.

Ignatova promptly disappeared. She arrived in Athens on a flight from Sofia in October 2017 – since when she had managed, unlike her lieutenants, to evade the authorities. Rumors abound: she’s dead, or held captive by criminals whose money she helps to move around, or sunning herself on a superyacht with a new name and face. Bartlett has toiled to try to locate her, and one of the more exciting moments comes when he spots Ignatova’s brother Konstantin posing for an Instagram post. Although the picture supposedly shows him in Sofia, when Bartlett enlists a boffin to examine the “digital breadcrumbs”, he can trace Konstantin to a specific address in Dubai. It briefly seems Bartlett may have triumphed where international police efforts have failed, but the lead in the end yields nothing.

The Missing Cryptoqueen began life as a BBC podcast, aired in 2019. A television adaptation is in development. Its appearance in print is inevitable – the new “platform-agnostic” world of nonfiction is really “platform-promiscuous”. Yet despite drawing on sources unavailable at the time of the podcast, the book betrays its origins: condensing the story into thirty-five nuggety episodes, each of which ends on a cliffhanger, it misses opportunities to be ruminative or exploratory. Repetitions that might be tolerable in other media – friendly recaps for a forgetful listener – are grating on the page. We read too many times of Ignatova’s pinchant for red lipstick, and of the luster of the gilded realm she latterly inhabited, adorned with “prestigious”, “exclusive” or “luxurious” baubles.

Given that Ignatova emerges from these pages as a cold-hearted fraudster, it’s odd that Bartlett describes her as a “visionary”. He’s nearer the mark in describing her (twice) as “painfully clever”. The painful bit is that from the start she had one eye on the exit. A key event in the history of OneCoin – important enough that he gives two detailed accounts of it, in almost identical terms – is a promotional jamboree at London’s Wembley Arena in the summer of 2016. True to form, Ignatova swooped in like a pop diva , to the sound of the Alicia Keys anthem “Girl on Fire”. The significance of that choice is apparently lost on Bartlett, though not, I suspect, on his subject, who’d surely have enjoyed the song’s paean to a character “living in a world … on fire, / filled with catastrophe — but she knows she can fly away.”

OneCoin’s investors can only rake over the ashes of catastrophe. Bartlett has tracked down several who hardly fit the received image of crypto bros lounging poolside in air-conditioned underpants: a pharmacist in a Kampala slum, a youth worker in Tower Hamlets, a single mother from Tennessee. Each could be portrayed as a victim of his or her own naivety, but it’s the rapaciousness of the scammers that sticks in the mind (and the throat). No detail in The Missing Cryptoqueen is more disquieting than the very last: despite being thoroughly discredited, this cryptocurrency bogus continues to be widely marketed and sold.

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