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What We Can Learn From OneCoin, Crypto’s Biggest Scam

by Moon
Published: Last Updated on
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Vone coin

Buyers misplaced over $4 billion to OneCoin leaders.

Cryptocurrency investing may be an journey. There are over 12,000 cash to select from, the market can publish dramatic features or losses in a single day, and crypto tasks vary from the world-changing to the ridiculous.

Volatility is a component and parcel of crypto investing. Getting caught up in cryptocurrency scams should not be. Sadly, crypto’s quick historical past is already plagued by tales of fraudsters, and OneCoin was one of many greatest. OneCoin’s leaders stole greater than $4 billion from traders world wide over a number of years.

What was OneCoin?

OneCoin was a Ponzi scheme posing as a cryptocurrency. Launched by self-styled cryptoqueen Ruja Ignatova in 2014, the rip-off attracted tens of millions of traders over a two-to-three yr interval. By way of flashy launches and catchy messaging, the glamorous Ruja satisfied individuals in 175 international locations to purchase packages of instructional supplies and OneCoin tokens. She instructed individuals they had been going to get wealthy and made them consider they had been part of one thing large. Sadly, the “one thing large” turned out to be a giant rip-off.

OneCoin claimed to be a cryptocurrency, nevertheless it by no means even had a blockchain behind it. It used multi-level advertising (MLM) to incentivize individuals to promote to family and friends. The mission was not traded on cryptocurrency exchanges – it had its personal platform.

In 2017, as authorities worldwide closed in on the scammers, Ruja Ignatova disappeared and has not been discovered since. Her brother, who took over as OneCoin CEO, was later arrested.

If you happen to assume all of this sounds just like the plot for a film, Hollywood agrees. Apparently, there is a movie referred to as Pretend within the pipeline. And the rip-off is already the topic of a wonderful nine-part BBC podcast referred to as The Lacking Cryptoqueen.

Classes we will be taught from OneCoin

No one desires to fall sufferer to a rip-off, even when they comprehend it would possibly occur. Listed here are some methods to guard your self.

Analysis a mission’s management

Earlier than you put money into something, whether or not it is a cryptocurrency or a inventory, take a look at the management. It is exhausting to know if web analysis in 2014 would have proven this, however Ignatova already had fraud fees pending in opposition to her in Germany. As early as 2015, authorities in varied international locations had been beginning to query the mission’s legitimacy.

Watch out for tasks that dismiss critics as “haters”

OneCoin inspired traders to affix small communities led by OneCoin salespeople. It was virtually like a cult that indoctrinated its clients into solely believing the nice concerning the mission. Any crucial information articles or voices from outdoors these teams had been labeled as haters and dismissed.

In case you are part of an funding discussion board that makes use of related techniques, watch out. It’s simple to get emotionally drawn in, particularly when your cash is on the road. However investigative journalists hardly ever criticize a mission only for the enjoyable of it or as a result of they do not like somebody. Hearken to the critics and consider their feedback – then you possibly can resolve for your self if their argument has benefit.

Use a good cryptocurrency trade

OneCoin hid the very fact it wasn’t a real cryptocurrency by solely buying and selling by itself trade. Huge exchanges have fairly restricted lists of cash, so there are sometimes good causes for a coin to not be obtainable from main U.S. cryptocurrency apps and exchanges. You need to at all times attempt to discover out why the coin is not simple to purchase, and do not belief a coin that solely works by itself trade and nowhere else.

Look past the crypto hype

Because the crypto trade grows, we see increasingly more PR-led tasks. Paid superstar endorsements are simply the tip of the iceberg as currencies attempt to tempt unwary traders to purchase their cash. Do your personal analysis and search for tasks which have utility and a long-term strategic street map.

One other easy methodology is to look the web for “[token name]” and “rip-off.” It’s possible you’ll discover unfair accusations from disgruntled traders who misplaced cash when the value fell, however the feedback are nonetheless price studying. Additionally use websites like Token Sniffer and Coinopsy, as they flag potential rip-off or lifeless cash.

Do not get seduced by guarantees of excessive returns

As we have seen in crypto this yr, some investments can generate extraordinary returns. If a coin guarantees these excessive returns although, that is a particular crypto purple flag. No one can completely predict whether or not the value of a cryptocurrency will enhance.

It is totally different if it’s a decentralized finance (DeFi) lending-earning mission otherwise you’re staking your cash to earn rewards for contributing to the general community safety. These are sometimes legit methods to earn curiosity in your property. However even then, you’ll want to perceive how these promised revenues can be generated.

Solely make investments cash you possibly can afford to lose

One of many heartbreaking points of the BBC’s podcast was the interviews with individuals who’d put all the things they’d into OneCoin. Worse, some had even borrowed cash. In Africa, the place salespeople focused distant farmers at harvest time, households bought land and cattle to purchase into the scheme.

Even when an funding appears like an unmissable alternative – certainly, particularly if it appears like an unmissable alternative – do not borrow cash to put money into it. The chance is simply too excessive.

Do not let the fraudsters take your cash

Sadly, cryptocurrency has all of the substances of an amazing rip-off. It’s constructed on a know-how that many traders do not fully perceive. There’s little regulation to cease individuals mendacity about their tasks or manipulating the market. And this yr, the headlines have been filled with tales of giant rewards and crypto millionaires.

This makes it simple for criminals to assemble plausible and tempting tales. They need to create a scenario the place individuals are petrified of lacking out on an amazing money-making alternative. However for those who arm your self with information and demanding considering, you will be much less seemingly to present them your cash.

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