The missing crypto queen and ‘the shadowy world of Maltese gambling websites’

OneCoin founder Ruja Ignatova stole US$4 billion from her investors before vanishing without a trace. She went company shopping in Malta long before the meteoric rise of her fraudulent crypto business.

“For a period, Ruja may have experimented with the shadowy world of Maltese gambling websites,” journalist Jamie Bartlett writes in his new book The Missing Crypto Queen. “Malta was a well-known ‘gateway’ location to move money in and out of the EU, and the tiny island nation had a thriving online gambling industry.”

The new book by Bartlett describes how, in early 2015, OneCoin was increasingly finding trouble moving large amounts of moving money through banks. So, Ignatova experimented with using a tried and tested method of moving dirty money, including by the Italian underworld – Maltese online gaming companies.

Ignatova or someone holding nominee status on her behalf used a Bulgarian company formation agent to set up multiple companies in Malta, all based at the same address: 1, Birds of Paradise, Mosta. These entities were owned by trust companies established in Curaçao, a small Caribbean island nation.

But Ignatova had already begun testing Maltese waters long before she established these companies.

Based on past research by The Shift, it’s possible that ACT Consultus Ltd (which has since been renamed) was the main formation company behind the Mosta address. It was previously based at Villa Malitah and is run by a Bulgarian gambling consultant.

“In May 2015, Ruja created an online gambling site called Coin Vegas which was marketed as part of the OneCoin family,” Bartlett writes, “although very little actually happened with it.”

Publicly available videos of Ruja’s presentation in Dubai in 2015 launching this new venture describe Coin Vegas as being operated by a Maltese company, with LGA (since renamed the MGA) licence no LGA/CL1/2009/599.

The mother of all pyramid schemes

OneCoin claimed to be the next cryptocurrency to take on Bitcoin, the most widely-held digital currency powered by blockchain technology, but there was a crucial difference.

Bitcoin transactions are recorded on what is known as a distributed ledger. Every person who holds a Bitcoin wallet is a node in the network, and transactions are verified and recorded using the collective computing power of everyone participating in it. Any wallet holder can look at every single transaction carried out on the Bitcoin network using that ledger.

OneCoin was never backed by such a ledger. Investors were duped into thinking the digital coins they were buying would eventually be usable in online exchanges when, in reality, they had no intrinsic value and no network to enable transactions between future users.

In essence, Ruja Ignatova was selling hot air.

Ignatova’s over-the-top promotional events and her penchant for selling the enterprise to investors as a once-in-a-lifetime opportunity propelled OneCoin to the world stage.

The psychological phenomenon of ‘FOMO’ (Fear Of Missing Out) is a common leverage point in the world of cryptocurrency, where investors are keen to get in early on opportunities whose value is set to increase later. OneCoin capitalized on this fear by promoting itself as the next go-to destination for investors hoping to make it big, with Ignatova claiming it would outgrow Bitcoin’s market cap and performance.

Ignatova took her scam further by using multi-level marketing techniques and forming promotional partnerships with pre-established resellers. Bartlett estimates that over one million people bought into her claims — and then it all vanished, along with their hopes and savings. In total, Ignatova is estimated to have defrauded investors out of approximately US$4 billion.

Ignatova disappeared while boarding a flight from Sofia to Athens on 25 October 2017. Her brother Konstantin took over the company and was arrested in 2019, but he claims his sister swindled him along with everyone else.

Four years after Ignatova’s disappearance, her former head of security and close advisor, the CEO of corporate intelligence firm Sandstone, was arrested in France in connection with the scam and is fighting extradition to the United States.

Ignatova has been placed on the FBI’s top 10 most wanted list, with Interpol publishing a notice asking every police force in the world to arrest her should she be identified, but Bartlett says she may have altered her appearance with plastic surgery to evade capture.

You can learn more about ‘The Missing Crypto Queen’ by listening to the BBC podcast about Bartlett’s investigation here.