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Ep03- OneCoin – Companion Guide For BBC’s “The Missing Cryptoqueen” Podcast

Good news! Since OneCoin is back on the news and “The Missing Cryptoqueen” already released an 11th episode, proving that they’re back for real, we’re going to double down on our efforts. Starting today, we’ll summarize two episodes a week to catch up with the new developments in Dr. Ruja’s case. We hit the nail on the head on this one, and there’s nothing left to do but let the roulette roll and see where the OneCoin story takes us.

In this episode, we learn that OneCoin’s internal slogan was “the greatest company ever” and Jamie Bartlett travels to Sofia, Bulgaria, to look at Dr. Ruja’s properties. This episode is free of mafia insinuations, it deals with the cultic aspects of OneCoin’s entrepreneurial culture instead. We’re also able to put a number on how big of a scam OneCoin really was. SPOILER ALERT: It was at least €4B big.

Remember, you can download episodes directly from the BBC, or listen to “The Missing Cryptoqueen” through Apple, Spotify, or iVoox.

About OneCoin And “The Missing Cryptoqueen’s” Episode Three

The most exciting thing about “The Missing Cryptoqueen” is the sense of immediacy it conveys. It’s a living and breathing podcast. The story was happening all around Jamie Bartlett and the team. The OneCoin people react to “The Missing Cryptoqueen’s” creation and, through social media, attack the creators with everything they have. And the whole scene is part of the podcast. And this is just episode three. In the end, they even ask for the audience to call and tip them about Dr. Ruja’s whereabouts.

This episode starts with Konstantin Ignatov, Dr. Ruja’s younger brother, personal assistant, and heir to the OneCoin crown. He was arrested by the FBI and charged with money laundering and fraud. The authorities had already declared OneCoin a fraud, even. Surprisingly, when Bartlett and the team visit the OneCoin headquarters, they realize that the company is still “open for business.” People are still buying OneCoin despite the fact that one of their leaders is on the run and the other was arrested.

That leads us to the cult-like aspects of the operation. A faith-like belief justifies the disappearance of the leaders as a conspiracy to stop OneCoin. In the quote below, you will feel the silence while reading the description of the organization’s offices. You’ll feel the Dr. Ruja worship. It’s just one step away from religion and very near a cult.  Jamie Bartlett describes OneCoin as “less a cryptocurrency and more like a belief system.” An expert in that field corroborates the hypothesis.

BTC price chart for 10/20/2022 on Bitstamp | Source: BTC/USD on TradingView.com
The Devastation That They Caused

At one point we, once again, listen to Dr. Ruja’s own voice saying the crypto scammers’ slogan. “In two years, no one will talk about bitcoin.” If you ever hear that, run. In the second episode, we figured out that OneCoin called the critics “haters.” In this one, we learn that the investors and employees are instructed to keep away from them Scientology-style. Another surprising fact is that the second term OneCoin uses the most to describe its critics is “bitcoiner.” Those pesky bitcoiners, always causing trouble.

We learn about the scale of the devastation that Dr. Ruja caused by hearing about the OneCoin Victims Support Group. The victims are broken, they’ve lost everything and then some. We also learn about the scale of the scam by way of a report/ database that producer Georgia Catt got her hands on. From all over the world, the organization was getting €60M a week. From August 2014 to March 2017, OneCoin’s revenue was over €4B. Over €100M were from the UK alone. And that’s where the report stops, the organization was still making money left and right.

Quotes From “The Missing Cryptoqueen ’s” Episode Three – “More Than Just A Coin”

An anonymous witness describing the OneCoin offices: 

“At its peak, it was about 50 people working in the Sofia office. Ruja’s office is on the 4th floor. You never saw her without the gypsy earrings, the gowns, the jewelry, everything. Even when she’s just working in the office. Inside the Sofia office, the crypto center is where members of the OneLife network are allowed to meet members of the Sofia staff who are important. If you are out of favor, they won’t let you in, or they’ll keep you sitting there the whole day, waiting. 

It’s set up almost like a cathedral. You don’t speak out loud, you whisper to each other. It’s all set in dark tones, everything is gilded. There was a big cardboard cutout of Ruja. You see people touching it and doing that stupid OneCoin sign like it’s an icon. It’s gone now because it eventually fell apart because too many people were touching it. Dr. Ruja! Dr. Ruja! The biggest insult that you can give OneLife is to say: “that’s not Dr. Ruja’s vision.”

Bitcoin-enthusiast Timothy Curry, describing the cult of personality behind Dr. Ruja:

“There were many cultish things that the company did. The repetitive indoctrination. If you look at the top leaders, the way they dress, the way that they showed things off. Ceremonial things, almost like, especially on stage. Everything, from the musical introductions to Ruja, to the theatrics, they really did create a worship behind her.”

OneCoin Material And Episode Credits

Six years ago, while OneCoin conquered the world, NewsBTC quoted the infamous Roger Ver speaking on the case. Then known as a “bitcoin evangelist,” the controversial figure denounced OneCoin for what it is: 

“In a recent interview, the owner of Bitcoin.com says he believes OneCoin is a fraud, and that investors should always be wary of new coins and read up before they put their money in things they don’t understand:

“There is never a cryptocurrency without a wallet. This sounds like more evidence of its fraudulent nature. OneCoin isn’t traded on a single exchange anywhere in the world as far as I know.”

OneCoin has been around for over two years, but questions surrounding its authenticity continue to plague the Internet.”

Say what you will about Roger Ver, but the man was right on the money on this one.

And finally, the episode’s credits:

Presenter: Jamie Bartlett
Producer: Georgia Catt
Story consultant: Chris Berube
Editor: Philip Sellars
Original music and sound design: Phil Channell
Original music and vocals: Dessislava Stefanova and the London Bulgarian Choir

Previous Companion Guides For BBC’s “The Missing Cryptoqueen” Podcast:

Ep. 01 – https://www.newsbtc.com/news/bitcoin/ep01-dr-ruja-companion-guide-for-bbcs-the-missing-cryptoqueen-podcast/

Ep. 02 – https://www.newsbtc.com/news/bitcoin/ep02-btc-killer-companion-guide-for-bbcs-the-missing-cryptoqueen-podcast/

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The Inside Story Of The Roger Ver Vs. CoinFLEX Conflict

The infamous Roger Ver is back in the headlines for all the wrong reasons. Like many players in the industry, the derivatives exchange CoinFLEX recently ran into financial trouble. Surprisingly, they blamed it all on Roger Ver and the circus started. Luckily for us, Chinese journalist Colin Wu covered “the entire insider details through a source close to the situation” in his newsletter. However, as you can see, it’s an anonymous source. So, take the story we’re about to analyze with a grain of salt. 

The summary of the situation according to Wu:

“On June 24, 2022, the exchange CoinFLEX announced that it made the decision to halt user withdraws, and the price of the platform Token FLEX subsequently plummeted, from $4.30 to less than $1.50 in four hours. At the same time, FlexUSD, the platform’s stablecoin, also began to de-peg, with prices dropping as low as $0.23.”

The funny thing is that both entities were clearly in business together. On May 14th, Roger Ver tweeted, “Interest paying FlexUSD by CoinFLEX  is on its way to being the default stable coin for the whole SmartBCH ecosystem if USDT & USDC don’t move quickly.” How did everything deteriorate so fast? That’s what this article’s about. 

Roger Ver Vs. CoinFLEX, The Play By Play

The story starts with CoinFLEX announcing to their partners that they “opened a special account for Roger Ver.” The account’s characteristics guaranteed that Roger Ver “would not be liquidated immediately if it fell below the maintenance margin, but rather that he would be given sufficient time to make a margin call.” Nothing special here, the man is a high-net-worth individual, deals like this are a dime a dozen in high finance. 

As a guarantee, Roger Ver offered “a margin of BCH,” valued “at around $400.” Then, the Terra collapse happened and the whole crypto market crashed. By the time CoinFLEX ”faced a liquidity crisis,” Bitcoin Cash was worth around $120. It’s still at that price range at the time of writing. This is where things get insane. The biggest revelation of Wu’s story is at the end of this paragraph.

“If that were all, CoinFLEX would have been able to cover its shortfall. However, prior to this, CoinFLEX had issued its own stablecoin, FlexUSD, like other exchanges. At this point, CoinFLEX used FlexUSD to buy a large amount of FLEX from the secondary market and opened short position to hedge the spot price. However, the counterparty to this short position was also Roger Ver!”

As we’ve seen happen again and again, “when the withdrawal restriction announcement was made, CoinFLEX’s total funds began to fall in a cyclical fashion.” And all hell broke loose. 

BCH price chart on Coinbase | Source: BCH/USD on TradingView.com
An All-Out Twitter War

On June 27th, the company’s CEO Mark Lamb tweeted, “CoinFLEX made the decision to halt user withdrawals on June 23, shortly after a long-time customer of CoinFLEX went into negative equity. ” Immediately after, the rumor that Roger Ver was that “long-time customer” began circulating.

The Bitcoin Cash leader went on the offensive and tweeted a statement obviously written by a lawyer. “Recently some rumors have been spreading that I have defaulted on a debt to a counter-party. These rumors are false. Not only do I not have a debt to this counter-party, but this counter-party owes me a substantial sum of money, and I am currently seeking the return of my funds.” How could those two statements be true? Remember that “the counterparty to this short position was also Roger Ver!”

However, Mark Lamb was not having it. Even though both parties were negotiating, Lamb took to Twitter and stated, “CoinFLEX also categorically denies that we have any debts owing to him.” Plus, “Roger Ver owes CoinFLEX $47 Million USDC. We have a written contract with him obligating him to personally guarantee any negative equity on his CoinFLEX account and top up margin regularly.”

Even if CoinFLEX is right in this instance, did they have to air their dirty laundry in public?

Roger Ver Vs. CoinFLEX, The Aftermath

Back to Colin Wu’s newsletter:

“In the end, Roger Ver’s position was completely worn out and turned into negative equity, while CoinFLEX was left with a lot of delisting FLEX. It was revealed that CoinFLEX had a real loss of $120 million, including losses from the de-peg of the stablecoin FlexUSD and the loss of withdrawals (less than $10 million) due to the collapse of the SmartBCH cross-chain bridge, which was built by CoinFLEX.”

And the fact of the matter is that, even if Roger Ver’s debt caused this, CoinFLEX’s risk management team has a few questions to answer. “Roger Ver became almost the only counterparty to the exchange, and this only counterparty had the privilege of not replenishing the margin in time,” Wu concludes. It was an unfortunate sequence of events, but both parties signed those deals and both parties took to Twitter to resolve what should’ve been a private matter. 

Shame all around.

Featured Image by Gerd Altmann from Pixabay | Charts by TradingView