Jamie Bartlett: In Search of The Missing Cryptoqueen

As an investigative journalist, Jamie Bartlett has a knack for spotting inconsistencies and strange behaviors. His published books include “The Dark Net” (2014) that details niche internet subcultures and online crime, “Radicals Chasing Utopia” (2017) about the motivations and growth of fringe political groups, and “The People Vs Tech” (2018), which was longlisted for the 2019 Orwell Prize for Political Writing and won the 2019 Transmission Prize.

But when Bartlett began pursuing the mysterious disappearance of OneCoin founder Dr. Ruja Ignatova in November 2018, his next endeavor proved to require an even higher level of scrutiny as he began unraveling the truth behind a billion-dollar scam whose mastermind seemingly vanished into thin air.

Bartlett delivered the opening keynote of the 2023 ACFE Fraud Conference Europe, sharing lessons learned throughout his investigation that fraud examiners should keep in mind so that “we can stop the next OneCoin.”

The OneCoin Fraud

In 2014, as Bitcoin hovered around USD 500 and slowly grew in mainstream notoriety, Ruja Ignatova announced the creation of a new cryptocurrency that addressed many of the concerns for “regular people” who were skeptical of Bitcoin. Marketing OneCoin as the easier to understand and more accessible alternative, Ignatova swayed early investors by claiming they would see returns of five- to ten-fold by simply sending money to OneCoin and letting the company set up their account. Ignatova boasted that growth would be tied to OneCoin’s inevitable explosion, and ultimately, it would become the world’s leading cryptocurrency. Thousands of people looking to get rich quick were hooked.

Having studied at Oxford University, later earning her Ph.D. in law, and reportedly spending time in financial consulting with McKinsey & Company, Ignatova’s credentials and confidence in OneCoin were infectious. The first OneCoin offices opened in Ignatova’s home nation of Bulgaria, later spreading to Dubai and Hong Kong. Within 18 months, Ignatova was speaking before 3,000 people at Wembley Stadium about OneCoin as thousands of investment dollars poured in daily. As OneCoin grew, so did Ignatova’s global presence. She fabricated advertisements to look like Forbes articles that were placed in trade magazines and spoke at major conferences and events. Slowly but surely, OneCoin and its apparent crypto expert leader developed “trusted” relationships with the public. In reality, Ignatova was targeting people whose lack of knowledge was their Achilles heel, and she played on their fear of missing out on an opportunity to make life-changing wealth.

OneCoin’s explosion, as Bartlett uncovered, was primarily built on a complex web of wealthy multi-level marketers who Ignatova targeted as top-level investors. With these networks already full of hungry investors from previous business ventures, OneCoin began to be sold around the world. By 2017, nearly 1 million people in 175 countries had invested an estimated EUR 4 billion. However, Ignatova kept investors — many of whom spent their life savings to get involved — in limbo for months. While they waited for OneCoin to actually be ready to sell on an exchange and see the returns they desperately needed, the coin’s price continued to increase. The only opportunity investors had to make money was by exchanging coins on OneCoin’s own marketplace, and those transactions were paid out using money from newer investors.

Yep, you guessed it: Ponzi scheme.

In October 2017, Ignatova began receiving information through her own insiders, including meeting notes and PowerPoint slideshows, that was being presented at Europol meetings as investigations by police forces in multiple countries began digging into OneCoin’s business. Coincidentally, it was around this time that Ignatova hired a private investigator to spy on Gilbert Armenta, who was helping launder OneCoin’s money and having an affair with Ignatova, to know if he was truly leaving his wife to be with her. This spy ultimately uncovered that Armenta had been arrested and was being used by authorities to help catch Ignatova.

On October 25, 2017, Ignatova boarded a Ryanair flight in Bulgaria that was headed to Athens, Greece. It was the last time her whereabouts have been confirmed.

Lessons for Fraud Investigators

Perhaps the most powerful tool driving Ignatova’s scam, and OneCoin’s ability to grow so rapidly, was the inability by authorities to bring legitimate, fact-based fraud charges forward in time to expose the Ponzi scheme. A notice published by the U.K.’s Financial Conduct Authority (FCA) in September 2016 suggested potential investors should “be wary of dealing with OneCoin.” In response, Ignatova hired a team of lawyers who wrote to the FCA and asked them to take down that notice, citing that they weren’t authorized to regulate cryptocurrencies, which the FCA honored; Ignatova used this result as a chance to legitimize her business. Similarly, because it takes time for investigators to gather and analyze information, come to the conclusion that criminal activity may be taking place and bring forth a formal investigation, this perceived inaction by authorities bought OneCoin even more time — in the eyes of common investors, if OneCoin were fake, surely the business would have failed already.

While major media outlets ignored the idea that OneCoin was a scam, smaller independent publishers had caught on. A story published by BehindMLM — a website run by the faceless “Oz” that is dedicated to exposing multi-level marketing scams — correctly identified OneCoin as a Ponzi scheme as early as 2014. However, because these types of journalists are perceived as illegitimate sources, investigators can’t use this information and need major publishers with name recognition and vast resources to back any claims.

This was Bartlett’s first lesson: be open-minded about the information you pursue and consider all possibilities. As new scams emerge, the key information fraud investigators need to break open cases may not be in the places you are used to finding it.

The other lesson investigators can learn from OneCoin came from Bartlett’s own investigative journalism. Bartlett sat down with Frank Schneider, who is currently fighting extradition to the U.S. where he faces wire fraud and money laundering charges related to OneCoin. Schneider was formerly the director of operations for SREL, Luxembourg’s state intelligence agency, and has an intimate knowledge of financial crimes. When Bartlett asked why the former spy worked for OneCoin for so long, and how he could have possibly not known a billion-dollar scam was unfolding, Schneider leaned on strategic ignorance, claiming the confusing and complicated technology was why he didn’t know the company was a massive Ponzi scheme.

To counter this, Bartlett asked Schneider about how, in 2016, when Ignatova increased the supply of OneCoin from 2.1 billion coins to 120 billion without changing the price of the coin, why he didn’t realize that something was off. Basic economics of supply and demand should tell anyone — especially a veteran intelligence agent — that when you increase the supply, demand changes, and therefore, so should the price. Schneider continued to use OneCoin’s technology as his scapegoat.

This was Bartlett’s final lesson: convenient uses of strategic ignorance should not be taken at face value as an excuse. Investigators need to ask difficult questions to reveal the true motivations and knowledge that fraudsters try to conceal. Through persistence and open-minded exploration, fraud investigators can succeed in identifying schemes and bringing down perpetrators faster.

What Happened to Ruja Ignatova?

Unconfirmed reports of Ignatova’s whereabouts have surfaced since her disappearance, but nothing has been definitive. From speculation that she was murdered in 2018 by a Bulgarian drug lord to the apparent sale of her former penthouse apartment in London, Ignatova remains one of the world’s most notable fugitives.

In 2022, Ignatova was added to the FBI’s Ten Most Wanted List, and the organization is offering USD 100,000 for information that can lead to her arrest.

“Or, you could come to me at the BBC where I could probably give you about 50 dollars for a service fee, and of course, my eternal gratitude, which is worth far more than 100,000 dollars — I’m sure you’d all agree,” Bartlett laughed.

As Bartlett speculated, part of the reason the FBI may be taking such a keen interest in OneCoin is the potential that the false cryptocurrency was used to launder money by organized crime organizations, which complicates this massive scheme even more, and has brought Bartlett’s investigation to this difficult crossroads.