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NEVER Forget The Lessons From The Bitconnect & One Coin Scams

Coin One and Bitconnect Scam

Disclaimer: We are calling Bitconnect and One Coin as scams in this article as a matter of opinion based on how many people lost their life savings.  We are not in a position to determine whether or not these are indeed scams from a legal point of view.

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There is a scene in the movie ‘V for Vendetta’ in which V says “Remember, remember, the fifth of November”.  

That whole movie’s premise was that people are generally courageous – they just need a way to remember what they have forgotten or grown numb to.

Crypto space is facing such an apathy and numbness to the scammers and shillers that sprout like the filthy fungi they are, everywhere.  

These filthy shitheads steal the money from hard working folk who come to Crypto as an alternative to the injustices of the mainstream, only to find out that the cure is worse than the disease.

For this very reason, remembering the past scams and how they were carried out will serve as a warning sign for the newbies and a friendly nudge for the crypto veterans.  

When we talk about the scams of scale in the crypto space then nothing really comes close in grandiosity and elaborate schematics than One Coin and Bitconnect.

We should forget the scams of the past but not the lessons they left behind.  In that spirit, this entire post is a recap of the two big scams that crypto verse has seen and the lessons that they left behind.  These lessons, if remembered, will serve everyone well.

Bitconnect scam in brief

Bitconnect Scam

Bitconnect’s lure was that investors could buy Bitconnect Coin (BCC) in exchange for their Bitcoin and other crypto (including USD stablecoins) and lock their BCC with the platform to earn a ridiculous amount of interest.  

For instance, they promised 40% per month interest and .25% daily interest on deposits exceeding $10,000.  

Essentially, investors gave up Bitcoin and real money in exchange for BCC in the hope of earning crazy interest.  One of their promises actually meant turning $1000 into $50 Million dollars within 3 years, if their compound interest model was to be believed.  

Another hallmark of this project was the ‘referral’ system where those who bring new investors will stand to gain a handsome 7% referral fees in addition to earning a cut from those referred by their referrals.  A classic pyramid ponzi.

Even with such ridiculous warnings on the wall, investors were blindsided by the FOMO and YouTube shillers they trusted.  

The elaborate scheme came to a screeching halt when the Texas Securities Board and North Carolina Board issued ‘cease and desist’ orders to Bitconnect.

The price of Bitconnect which was coasting at $377 on January 7th, 2018 came crumbling down to $8 by January 28th, 2018.  A fall of 98%.   

This left the investors in a shock.

Since the unfolding of this elaborate scam, the FBI has been investigating the Bitconnect.  They have issued a statement and soliciting information from the victims: “The entire market for BCC crashed in late January 2018, after two U.S. state-level securities regulators issued public letters warning investors of the Ponzi-type nature of Bitconnect. This led to Bitconnect completely shutting down its exchange for BCC, eliminating the market for the cryptocurrency and stranding investors with near-worthless cryptocurrency.”

Bitconnect’s scam had the hallmarks of a classic ponzi scam including:

  • Crazy rate of return without any actual product or service
  • Pyramid referral system
  • Lack of transparency about the core team
  • Lack of reliable backers or advisors on the platform
  • Too many shillers promoting the project for affiliate commissions

NOTE: If you are a victim of the Bitconnect scam, you can help the FBI with their investigation by completing a brief questionnaire.

One Coin scam in brief

One Coin Scam

OneCoin is one THE biggest exit scam in the crypto space costing investors an estimated $4 Billion.  Yet, the signs were not apparent with the OneCoin.  

OneCoin claimed itself to be a cryptocurrency that people could mine and use it as a payment system.  

Their official channel and the video is still available:

Because people were given the option to mine the coins, it was difficult to suspect a foul play.  However, the mining was not a Proof of Work where you use your computer to mine the coins, they used a Proof of Stake model.  

How do you stake if you don’t have the coins?

You cannot.  

Here is where the evil genius was incredible. OneCoin offered various packages with different staking output rates.

For instance, check the rate of staking output in below table:

One coin rate of staking output

Not just that, some packages were listed for insane price:

Coinone Package

Here is Ruja herself selling a package on top of existing packages as a ‘special time sensitive’ deal to the innocent investors.

“The bitch of Wall Street meets MLM”

The true success of OneCoin was clubbing the OneCoin staking model with a pyramid like Multi-Level Marketing (MLM) model. 

Dr. Ruja’s ingenious plan took a moonshot when she involved the who’s who of the MLM industry who were quickly lured into selling OneCoin to their network to tap into the insane gains.  Some of them even made millions in just commissions.

These MLM marketers then bought more OneCoin to qualify for a higher payouts and potential of minting millions when OneCoin hits €100.

She not only convinced the most successful businessmen from the MLM world to work for OneCoin, she even got them by the chops by luring them to invest their own profits back into the OneCoin.

Dr. Ruja referred to herself as ““the bitch of Wall Street, meets MLM”.   And she indeed was.

Evils beyond control of Dr. Ruja

The BBC expose describes that Dr. Ruja never wanted the OneCoin scam to grow as big as it did.  But once it did, she couldn’t stop it because she was not let to.  

BBC article reveals that “People involved at the early stages have told him it was never supposed to be a billion-dollar scam. She tried to close it down, he says, but the dark forces wouldn’t let her.”

At the end, Dr. Ruja’s brainchild helped many shillers, scammers and evil forces to become filthy rich while leaving many innocent investors who were looking to become rich with OneCoin were burnt and left to ashes.

Dr. Ruja’s brother was arrested in the US on money laundering charges.  Dr. Ruja is still at large. 

In summary, here is how OneCoin scam unfolded:

  • Dr. Ruja introduced OneCoin as the ‘bitcoin killer’
  • Investors were required to buy into packages to be able to mine OneCoin
  • Packages ran from €140 to €55000 (and more)
  • Investors inviting others to the platform were paid commissions
  • These commissions were paid in 60% cash and 40% OneCoin
  • Many people re-invested their commissions back into OneCoin in the hope of becoming millionaires
  • Dr. Ruja has been missing since 2017 although her brother was arrested in the US on Money Laundering charges
  • The total scam is estimated to be over $4 Billion although many people believe it might be in the ballpark of over $10 Billion

Lessons learned from One Coin and Bitconnect debacle

Every ponzi-pyramid-scam scheme has a few themes that can help you identify them before losing money or FOMO in.

Here are a few:

crypto Scam Alert

  • Salesmen or confidants?

One determining factor that seems to work almost every time is the gut feeling.   

Are you getting a sense of dealing with an old car salesman or are you feeling like you’re talking to someone who is passionate about what they are doing.  

This key distinction is what your gut is great at picking on.  

Do not ignore it.  

We run away whenever we are dealing with salesy folks, even if the project sounds ok.  Prime example:  

We stayed away from Bidao ICO project because of their salesy ICO structure.  

Don’t ignore your gut feeling, it is right most of the time. 

  • Too good to be true

If it is too good to be true, then it probably is a scam.  

While there are exceptions to this rule when it comes to Bitcoin and seed investment, they take incredible patience and they never promise anything.  Contrast to that, the ponzi-pyramid-scams all promise the sky and beyond.  If it sounds too good to be true – think again before handing your wallet over.

  • Stinks like a ‘get rich quick’ scheme rather than an investment

Retire within 6 months  |  Make a year’s worth salary over a weekend | This is next bitcoin, but better | Plug and play, watch your income multiply without any work | No work or experience needed, we will do it for you, just give us your money.

All of these statements are designed to do one thing and one thing only: separate you from your hard earned money.

  • No actual product or solution

If all you see in a business is a ‘promise’ to pay you exorbitant amounts of returns on your investment but they have no product or service in place, that is a clear indication that they are a ponzi.

Even if you do see a product or service and if that is mediocre at best or looks like it has been mashed up together to lure people – dig more before you part with your money.

  • Lure of Insider information

Crypto gurus are experts at this.  

Their pitch always starts something like “we have just uncovered this massive movement that no one is seeing, and this could turn your $1000 to $1 Million in 6 months” or something in those lines.  

If you read such hyperbole – know that they are out to get you.

  • Tier systems

Tier system: Invest $100 get 5% free, Invest $1000 get 15% free and so on, these are classic tier systems.  They also take shape of ‘invite 5 friends and get this benefit, invite 15 friends and become a VIP, etc.,’ 

Not all tier systems are a scam. Most are.

If the program structure is such that you get a cut from every new ‘victim’ you introduce then it is most probably a scam waiting to happen.

The people who get involved early in this pyramid scam do get money and that is why they honestly believe that they have discovered a gold mine and it is difficult for most of them to believe that they are innocently perpetuating a scam.  

This lure of making boat loads of money pushes them to pimp the project even harder making the inventors of the scam super rich.

  • FOMO offers

FomoInvest in the next 3 hours and get this bonus | Leave everyone behind by investing early |  First 1000 investors will be elite members eligible for special dividends | Difference between investing now and a month later is $150000000000 | and so on.

If the pitch is designed to appeal to your greed and instigates a Fear of Missing Out response, take a deep breath.  Are you about to take a plunge into scam-verse?

  • Glitter, lots of it

One of the hallmarks of an elaborate scam is the grand events and expensive venues.

Why not, it’s not their hard earned money that they are splurging.  

These events usually take place in grandiose settings, blasting music, food and beverages flowing freely and glamor is everywhere.  

People fall for the glamor in the hopes that they too will be living this shiny life themselves one day.  

That lure for glamor is the kiss of death for their hard earned money.   If you see too much glitter – run away before it sticks on you.

  • Lock in your capital, no thanks

One of the giveaways of a scam is the promise to pay you interest and your capital back after a specified term.  

For instance, a company could promise to return your Bitcoin with a 50% interest if you lock in for 6 months or a year or so.  

If they can convince enough people to do the same, they can just return the money from the people who invested after you to make the market believe that they are indeed paying the crazy interest promised and thus creating a FOMO in the unassuming investors.  

Once it scales – they can shut the door without raising the flags since everyone would be waiting for the time to lapse.  

  • Lack of reliable backers/advisors

You will not find people with great reputation involved in the projects.  The people who do lend their name or become part of the team will be the ones with hard to verify history or they appear on the world scene suddenly.  

If you think about it, we did not know who Vitalik Buterin was, however, we saw many reliable crypto industry veterans backed his idea and got involved with the project.

Bitconnect had no intellectual or upright backers. 

In fact, Vitalik called them out as Ponzi at the outset, albeit, his warnings fell on deaf ears.

  • FREE, Free, freeeeeee!

Free CryptoInvest today to get 50% free.  

Invite your friends and we will give 50% of their investment, for free.  

Share our news on YOUR social feed and we will give you XX for free.  

Email your friends about us and for every single email that gets read, you will get $$.  

The list goes on.  

Whenever you see ‘FREE’ offers to invite more people – it probably is a scam that is preying on greed.  

Run away at once.

Common factors in One Coin and Bitconnect scams

There were some striking resemblances between these two scams.  Look at the below summary table:

Warning signs
Affiliate commissions for bringing new investors
People were paid handsomely for bringing new investors onboard
YesPerpetual commissions were promised to 'shillers'
Tiered structure investment plans
YesPlans ranged from Euro 140 to Eur 55,000 or more
Interest based on investment amount from $1000 to $100000+
Too good to be true offers
YesSold on the hope of OneCoin reaching Euro 100 one day
YesPromise of interest of over 40% per month
Pyramid scheme
YesMLM combined with cryptocurrency
YesMulti-level referral system from commissions of .5% to 7%
Lack of experts and industry professionals
YesNo known experts were onboard
YesNo known experts were onboard

Why should you not trust influencers?

In the cases of Bitconnect and One Coin, the so called media influencers (bloggers, YouTubers, Twitter celebrities, Facebook groups, etc.,) have all been duped into FOMO and they in turn created a FOMO in their followers.  

It is not clear whether or not these influencers were actually aware of the schematics of the elaborate plan to scam people of their money, nevertheless, they have played a BIG role in people losing their hard earned money.

The entire crypto space is less than 10 years old.  It actually got serious followers in the last 5 or so years.  For someone to claim that they are experts in the field is utterly misleading.  

We have always been telling our readers – never trust anyone on the internet, especially shillers. Do your own research and use the information on the internet to gain multiple perspectives.  

Force yourself to search for the negative point of view when you are in the grips of FOMO.

That one strategy of forcing yourself to search for multiple POVs seems to work excellently from our own experience.

Are you FOMOing?  use our FOMO/FUD checker to find out!


Thank you for reading and sharing this article. We appreciate you.

Stay safe and healthy!

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Everything in this article is an opinion, not an advice of any kind. This material has been prepared for general informational purposes only and it is not intended to be relied upon as accounting, tax, investment, legal or other professional advice. Please consult with a professional for specific advice.

We do not endorse or guarantee the accuracy of the information and claims made.

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