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Is OneCoin the Biggest Financial Fraud in History?

November 6, 2019, 2:13 PM UTC

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This week saw the release of the final episode of Jamie Bartlett’s fantastic BBC podcast series The Missing Cryptoqueen, which I’ve referenced in this newsletter several times already. In it, Bartlett and his team try to track down the missing Dr. Ruja Ignatova, apparent mastermind of the cryptocurrency-themed pyramid scheme OneCoin.

Though the U.S. government previously estimated OneCoin’s take at $4 billion, Bartlett’s sources claim the worldwide take was as much as $15.8 billion as of early 2018 – and OneCoin is still operating. In the final summation, it seems entirely plausible that OneCoin will have stolen more than the $19.4 billion lost by Bernie Madoff’s victims, making it the largest financial scam ever.

The throughline of Bartlett’s podcast is his quest to find Ruja, who appears to be on the lam – but I won’t spoil how that resolves. And anyway, the more important part of the final episode may be Bartlett’s invaluable on-the-ground reporting on OneCoin’s impact in Uganda. OneCoin’s viral, commission-driven structure helped it worm its way into many vulnerable, tech-naive communities, also including working-class England and South Asia. Bartlett shows us the devastating fallout – families torn apart, goats and houses sold to buy into a scam, and even churches seemingly suborned to corruption.

At least some of those responsible may yet face justice. In New York, the trial of accused accessory Mark Scott is currently underway, and Ruja’s brother, Konstantin Ignatov, took the stand yesterday as a cooperating witness. (Independent reporter Matthew Russel Lee has been covering the trial on Twitter.)

But this isn’t about one crime. The Missing Cryptoqueen delivers a damning message about how techno-outopianism, especially in finance, can actually harm the people it’s intended to help. OneCoin succeeded mostly by pointing to the massive success of Bitcoin, and specifically leveraged the Bitcoin community’s continuing promises to “bank the unbanked.”

In places like Uganda, decentralized digital currency does have real promise. But OneCoin moved faster than the good guys and used that narrative to fuel a short con. The havoc wreaked around the world is bad enough, but the damage done to the idea of innovation itself could be worse.

Update 12/11/19 – This piece has been updated with more precise information about how much money OneCoin may have taken from victims.

David Z. Morris

@davidzmorris

David.Morris@fortune.com

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