The cryptocurrency market—a fast-growing financial market—disrupted the traditional financial system. From its decentralized nature and reduced transaction costs to financial inclusion, cryptocurrency assets allow us to explore a new way to manage our money and investments.
This financial market is legit by itself. However, the increasing number of crypto-disguised fraud entities makes the public skeptical about the reliability and sustainability of cryptocurrency investments.
One notorious crypto investment scam in history is OneCoin – once the second–largest cryptocurrency in the world. Positioned as the “better Bitcoin,” hundreds of thousands of investors put their money into the scheme, thinking it could exponentially grow their capital.
In this TRU Insight, we’ll learn everything you need about the operation of the OneCoin Ponzi scheme. Read on and spot fraud characteristics that you must look for to prevent being a victim of such scams.
Overview of OneCoin Cryptocurrency
Founded in 2024 by OneCoin Ltd., OneCoin was promoted as a new cryptocurrency technology that investors can mine, invest, trade, and make payments with.
It claimed to be the next big thing in the cryptocurrency markets—saying that this crypto could be an investor’s path to wealth. It’s even marketed as the better Bitcoin, which piques the interests of Bitcoin skeptics.
This positioning, coupled with the strategic launch date, attracted hundreds of thousands of unsuspecting investors. But to their demise, their financial dreams vanished together with their investments.
Initially revealed by several whistleblowers like Timothy Curry and Jen McAdam, OneCoin Ltd, and OneCoin seemingly exuded a Ponzi scheme operation. And three years after its launch, xCoinx collapsed without any warning.
As OneCoin’s exchange, this sudden collapse only meant one thing—the members’ investments were left trapped. This ultimately resulted in an accumulative USD 4 billion lost on investment.
This marks the largest cryptocurrency scam in history.
How OneCoin Scammed Its Victims
Once the second largest cryptocurrency in the world, OneCoin and its operators managed to scam unsuspecting investors by employing the typical Ponzi scheme method.
They promise a guaranteed lucrative return, pay early investors with the investments of new investors to create a sense of lucrative profits, and encourage them to recruit more into the scheme.
Let us explore how OneCoin scammed people:
Non-Existence of Blockchain
OneCoin never had a real blockchain, which meant the so-called cryptocurrency didn’t exist.
Unlike legitimate cryptocurrencies like Bitcoin and Ethereum, which operate on decentralized and verifiable blockchain networks, OneCoin was entirely centralized and controlled by its operators.
The lack of transparency regarding OneCoin’s operations and fund allocation made it difficult for victims to recognize the early warning signs of fraud.
Plagiarized Educational Packages
OneCoin claims to offer valuable cryptocurrency education through its expensive educational packages. However, many of these materials were plagiarized, outdated, and provided no real value to investors.
These overpriced packages served as a cover to justify the recruitment-based revenue model, ensuring that new investors kept pouring money into the scheme.
High-Performing Cryptocurrency Promise
Ruja Ignatova, the operator of the OneCoin Ponzi scheme, marketed this cryptocurrency as the new big thing in the cryptocurrency market. According to her, OneCoin has a goal of outperforming Bitcoin.
This promise was extremely appealing and viable for the unsuspecting victims as OneCoin was once the second largest cryptocurrency per market capitalization, almost 50% shy of Bitcoin’s market value. OneCoin even outperformed Ethereum and Litecoin.
But in reality, OneCoin was not worth even a single penny because this cryptocurrency and its supposed blockchain didn’t exist. The only profit stream for the investors is through the commission they receive after recruiting a new investor into the scheme.
Sudden XCoinX Shutdown
OneCoin launched XCoinX – its internal exchange – to allow members to trade OneCoin and convert it into a fiat currency for withdrawal. However, the operator tightly controls the exchange since OneCoin has no real value outside its ecosystem.
Eventually, XCoinX was shut down without warning, which trapped investors’ funds and left them unable to cash out their supposed profits.
This move solidified OneCoin’s status as a scam, as members were left with worthless digital assets they couldn’t sell.
False Sense of Community Through MLM Operation
OneCoin used multi-level marketing (MLM) tactics to build a strong sense of community and trust among investors. Members were incentivized to recruit new investors through commissions, fostering a cult-like following that discouraged skepticism.
The fear of missing out (FOMO) and social pressure within the network made it difficult for members to question the legitimacy of OneCoin until it was too late.
How Did the Public Become Aware of OneCoin’s Ponzi Scheme Operation?
One year after OneCoin became the second-largest cryptocurrency and three years after its launch, the so-called digital coin—along with its websites and exchange platform—abruptly collapsed, exposing its fraudulent foundation.
The unraveling of OneCoin’s Ponzi scheme was largely due to courageous whistleblowers who risked their safety to bring the truth to light.
Key Whistleblowers Who Exposed OneCoin
Timothy Curry – The Early Critic
Timothy Curry was one of the earliest and most vocal whistleblowers against OneCoin.
He tirelessly worked to expose its fraudulent nature, using social media and other platforms to warn potential investors before the scam fully unraveled.
Jen McAdam – Victim Turned Advocate
Jen McAdam, a victim of the OneCoin scheme, became a prominent whistleblower after realizing she had been deceived.
Determined to fight back, she founded a support group for fellow victims and collaborated with authorities to bring global attention to the scam.
Whistleblowers at Risk
Both Curry and McAdam faced significant security threats for their efforts, as their investigations exposed high-profile criminals—including several Bulgarian crime lords—who were deeply involved in the scheme.
Their bravery played a crucial role in unmasking OneCoin, ultimately leading to international investigations and legal actions against its operators.
