OneCoin looks to have finally bitten the dust

Whilst Bitconnect was a firework of a Ponzi scheme, reaching ridiculous highs before blowing up a few months later, OneCoin was a scam that had been running for years before finally biting the dust. Despite the suspicion surrounding the “cryptocurrency”, it is only in the past few days that the leaders have finally been arrested.

OneCoin originated in 2014. Although criticism was prominent, there was little done to stop the scheme continuing. Finally though, one of the leaders, Konstantin Ignatov, was arrested in the US over the weekend. The charges laid against him include a wire fraud conspiracy charge. The older sister of Konstantin and main name behind OneCoin, Ruja Ignatov, has been charged with money laundering, although she is still yet to be caught.

What makes the case of OneCoin so amazing is how successful it was at bringing in money. The scheme was simple enough and follows a typical multi-level-marketing (MLM) model. People would buy education materials of different prices and then attempt to recruit more people to earn bonuses. The only monetary income was through recruitment – there was no actual product.

The most shocking aspect about OneCoin is that it didn’t even bother to create a blockchain. Even without such, the company was able to make over $3 billion and supposedly had millions of customers.

Whilst this may look like a death blow to the many other MLM cryptocurrency schemes, those involved in such have seen it as an opportunity. One Telegram group believed that as OneCoin was now going out of business, they could attract it into their MLM and show that not all MLM cryptocurrencies are scams. Unfortunately, history isn’t on their side.

Whilst the capture of Ignatov and failure of OneCoin is certainly a positive, there are still many more scams within the cryptocurrency industry that need to be dealt with. Police investigations are long and arduous tasks, meaning they can usually survive longer than expected. Therefore, those of us working in the industry as well as fans of cryptocurrencies, it is our responsibility to call out scams when we see them.

In doing so, it may be possible to stop people losing their money and stop such damaging schemes infesting cryptocurrencies.