Cryptoqueen: A woman scammed the world, then vanished (2019)
bbc.com
bbc.com
> After Dr Ruja's non-appearance in Lisbon, a point came when Igor Alberts, like Jen McAdam, asked to see evidence of the blockchain. He didn't get it, and in December 2017 he quit.
> I ask if he felt guilty, for having sold so many people a coin that didn't exist, and for having made so much money in the process.
> "I felt responsibility. Not guilt," he replies. "You can never be blamed for believing in something. I had no clue that it could be false. I didn't even know what is a blockchain… What doubt can I have?"
Versus the woman who lost a lot of money and convinced her friends/family to also throw away their money:
> By contrast, Jen McAdam says she bears a heavy burden of guilt. I ask her how much she earned from selling OneCoin and she says it was €3,000 - €1,800 of which she received in cash, and which she used to buy more OneCoin.
The line about “you can never be blamed for believing in something” is of course self-evidently ridiculous and not something Mr. Roberts would pretend to believe in any other context. But “I’m not a bad person, I was a hapless victim like everyone else” has a compelling logic when you’re profiting from a bad system.
We all have a responsibility to question our beliefs, and what harm our actions cause.
Can you point me to any source that spells it in legal terms in relation to general public (not specific cases like food inspector)? Like some written law.
Also if existed think of what would such law would to to politicians unless they're specifically exempt.
If you made a really solid crypto today, that was designed to remain solid and relatively flat, it wouldn't be popular - because the whole attraction is the 'easy money' euphoria.
No euphoria, no attention.
It's why a 'really good Bitcoin' - which tried to price at $1 USD today, and remain at that real valuation and avoid devaluation, would be hard pressed to exist - it wouldn't take hold. Or rather - that kind of financial instrument would have to be sold to banks, not small change MLM people, and banks are really conservative. It may happen at some point.
USDC TUSD and BUSD are further popular examples.
Cryptocurrencies are not MLMs, you would do yourself a huge favour by learning what they are.
In brief, Bitcoin is a scarce asset, and Ethereum is the credit required to run trustless logical conditions relating to a transaction, and also securing assets involved in those conditions.
Disclaimer: I own zero USDT and an insignificant amount of USDC, being rather skeptical on "stablecoins" in general.
That reserves don't add up to the currency in circulation is somewhat similar to a central bank but the similarities end there and they are basically nothing alike.
Yes, please do that.
Cryptos are about economics, capital, greed, manias than they are anything technical or block chain.
Cryptos are de-facto scams, irrespective of what some founders or participants might think, at least as of today.
That you can theoretical buy cleaning supplies from Amway does not make it not a scam.
There is nary any value in any of them, and given some of their costs vis-a-vis electricity usage, their 'net value' is definitely very negative.
Anyone with a shred of understanding of actual monetary finance and human nature can see them for what they are.
I think most people do.
Digital currencies have a future in some form, but most (all?) of the cryptos we see today are just straight up 'hustles'.
While they are called crypto currencies, most of them if not all aren't used as currencies.
I just to give a hint I am involved since 2011 and just dumped all crypto. When I get crypto tips from strangers at my son's swimming team, it's about time to quit it.
You can achieve this any number of ways and it has nothing to do with currency or money. FYI Gold, which you can buy a million different ways.
But since prices are crazy volatile, and it could be worth $0 tomorrow, it can't be used as currency, and it makes a terrible store of value.
For every 'practical reason' to use a crypto, there are already many other better solutions.
The only 'real reason' people buy them is because they want to make money flipping it and that's it.
Now that inflation is up again, people are realizing that fact. Gold is going up, Bitcoin is going down.
MLM creates tens of billions in revenue per year in the US alone. Cryptocurrencies aren't inherently marketing schemes but they're pretty close to it and most of the value they have on markets today is basically a case of a 'greater fool' mechanism.
Also market caps for crypto is pretty meaningless. If I mint a trillion random coins and manage to sell a bunch for a dollar I'm the richest man on earth by market cap. Market cap without considering liquidity is meaningless and most if not all of these coins will go to zero as soon as someone actually tries to sell them en masse.
I did and it changed absolutely nothing. It's literally just the dot com bubble all over again but it keeps coming back every 3 years.
Here, I'll explain the core problem of the dot com bubble. People started internet companies with basically close to zero revenue. To convince investors to buy in they used weird non standard metrics that indicate popularity and growth potential like page views. The fact that these businesses were not earning money let the imagination of investors run wild. Companies that were actually earning money had much lower valuations back then, because people immediately understood the value proposition and that growth isn't endless.
It's the same with Bitcoin. There is no reason why it should have such a high market cap. It's only riding network effects but those are all there is to it, MLMs are exactly the same, they endlessly recruit members and that is how they make money.
Because there are no other reasons, the imaginations of speculators run wild. They will come up with an endless number of bullshit reasons that you have to cross check. When the initial pitch turns out to be wrong, they just shift goalposts and come up with another reason. Remember, Bitcoin started out as a currency, then became a store of value and now it is becoming a settlement layer.
Really, if you want to gamble your money in Bitcoin, do it with the realization that it's just that, a gamble with better odds than a conventional casino.
The vast majority of people don't buy Bitcoin because they want a deflationary currency that goes up slightly faster than inflation, they buy into it because of its volatility and ability to generate otherwise impossibly large returns fueled by future investors.
To me, bitcoin is first and foremost a brand.
But I agree you don’t need to say think one person is “inherently” more ethical than the other: all else being equal, the person who got badly burned by MLM is going to be more empathetic than the MLM millionaire.
>"I did the calculation how many coins we needed to become the richest person on the planet," Igor says. "I said to Andreea, 'We need to build it up to 100 million coins, because when this coin goes to €100 and we have 100 million, we are richer than Bill Gates.' It's mathematic. It's easy as that."
100€ * 100 million = 10 billion€ Bill Gates net worth 2016 was 76 billion dollars. So much for "It's mathematic. It's easy as that."
https://twitter.com/BillyM2k/status/1393271686384914432/phot...
I remember seeing Ethereum starting up and they had a demo where you could make your own cryptocurrency in about a page of code. I thought this shit is never going to work. I WAS SO WRONG.
I am sure this cryptoqueen scammer put a ridiculous amount of effort into her scam when these people who actually made absurd amounts of money legally in altcoins did far less work.
If you and I did what you'd describe it would almost certainly not succeed. A high effort fraud has a much higher likelihood of returns.
https://azure.microsoft.com/en-us/services/blockchain-servic...
No I'm pretty sure the people who hoarded gold (coins) have made more money from blockchain than IBM and AWS.
legit projects are expensive and have high rate of failure
doge is just one success out of probably thousands of others that tried similar concepts. Doge was able to gain a loyal following and community early on.
A practically-infinite cap and always-easy mining? It's designed to rapidly deflate in value. _That's the joke_. And yet it bubbles.
It also can handle higher transaction volume with cheaper fees.
I don't think it'd be a good currency, but it's funny to compare it with bitcoin which was marketed as such but is totally a failure for that use case.
If it is inflationary like doge you have the incentive to spend it instead of hoard it.
https://www.dextools.io/app/uniswap/pair-explorer/0x7b736449...
Probably got on the market before the BTC/Tesla announcement and then pumped it, then thew DOGE in the for the memes and then Tesla announces that BTC consumes too much energy and that are looking out for a greener alternative. ETH is switching to PoS. At this point, he is probably slowly filling bags of ETH and gonna pump as soon as PoW on ETH ends. Expect a series of excited twits from Elon then
As soon as Tesla stated that btc was bad for the environment it was clear they'd be leaping on eth in the future.
What's the actual timeframe for that move?
Those articles also mentioned a lack of incentive due to sending the price to zero, but perhaps that's an incentive now since there are ways to short the price of a coin.
I have seen this first hand, on a much smaller scale, at a startup that was riding the blockchain hype with investors. It is really incredible and eye-opening to me what you can accomplish with hype and trust, with absolutely nothing backing it. It makes you realize that it doesn't matter if what you build is cool or innovative, if you can't get people to trust you, it won't succeed.
Granted, I recently graduated college, so I may be bias from experience. I just have seen a giant amount of finance frat bros that pour money into Bitcoin cause “banks are like the horse and buggy”.
Crypto is one huge scam and pyramid. Period.
You can send $50 via Western Union for $1.25, but it might cost 10x to 20x that in BTC transaction fees alone. The receiver can pick up cash at any WU location without an ID, but the last time I checked, to cash out cryptocurrency into a currency people actually use, exchanges require bank accounts, photo IDs and smart phones with cameras that can verify identities, and they charge their owns fees on top of the network's transaction fee.
In which country does this happens? Makes no sense to me.
Here is my post that has more discussion on the topic:
It is a proposed standard (not accepted) that allows you to use micro-payments in crypto to pay for access to sites as you browse the web. While it isn't perfect, a web free of paywalls and ads is something I would pay for, if it was easy to use, secure, and integrated into the browser. I'm not sure it will have enough momentum to become a thing, but it is an interesting idea.
And, to your point, the only legit use case for crypto I have seen.
Do you have an example of something useful or valuable done with ethereum?
What are you talking about?
Actual finance graduated though? What the fuck were they doing in class all of those years to even think of the two as comparable?! For one let me know when I can get a mortgage or auto loan from bitcoin itself.
It's the Theranos approach. With a charismatic and strong character as founder you can build hype and get investments without even having a product. Being on friendly terms with investors also helps to establish trust.
I have collected some of the cases and different points on my post here, including the infamous OneCoin:
(And there's no judgement in that, if you make a living selling fridge freezers it doesn't mean you have to care much about fridge freezers)
What is wrong with this? Of course people who believed in cryptocurrencies since the beginning have seen greater returns compared to people who started investing now.
Every investment disproportionally rewards early adopters. Stocks, even simple savings accounts.
But then you have Theranos and WeWork and all of that late '90s dot-com crap. Most of those companies had nothing to do with tech, but still raked in lots of VC money hoping to sucker people into purchasing their worthless stock after their inflated IPOs.
Of course, it has to be mentioned that the line between fraud and value gets incredibly fuzzy in tech. So much tech is "solutionized" into products that solve problems that are nonsense to begin with. Everyone believes they need cloud-this, or managed K8S, or auto-scaling whatever. The whole industry looks like a fraud at times. Especially enterprise marketing and sales. IBM, Oracle, and others have made a racket on this. And yes they have actual products with actual features, what they are selling are dreams and fairy tales. Look closely at crypto and you'll see the same cottage industry around it today. I mean, what is NFT other than credit default swaps (CDS) for the art market? It's abstracted ownership ("ownership" with a huge asterisk next to it). You even have initial coin offerings (ICO). Every thing from the dot-com and 2008 financial engineering crisis have all been replicated in crypto.
Theranos was trying to make and sell a real product but the product didn't work so they lied and cheated to cover that up because they had nothing else to offer.
Every business is dreams and fairytales because extra sizzle gets more customers
It's different from cryptocurrencies which are pure scam plays from the start.
It's like trading stocks, but without any fundamentals or underlying value to interfere with the "to the moon" narrative.
Most people involved in anything aren't there for the thing, they only care about money they are making from it.
There. Fixed it for you.
Not everybody on this forum worships at the SV altar of capitalism :-)
They went to Uganda where OneCoin was big. They had created a MLM type system there where they got the local priests to give sermons on why it was good. They interviewed people who sold their livestock - even though they didn't own a computer or cell phone so had no idea what it was - for a few hundred dollars to invest.
It was also highly marketed in the Arab world where it was marketed specifically towards people who can't invest in companies that have interest on loans.
Truly a wild scheme.
The Wig worked the Africans for a week, incidentally bringing about the collapse of at least three governments and causing untold human suffering.
At the end of his week, fat with the cream of several million laughably tiny bank accounts, he retired.
So I asked her to forward the marketing materials to me, and oh my god, it is not possible to discern the problems wrong with it without formal education in both computer science like linked lists and initial exposure to real blockchains.
Its doesn’t matter that the first question to ask was “ok where is the block explorer and what consensus model does it use” because nobody exposed to onecoin first would ask that
The other thing, which I find much funnier, is that they become not fraudulent just by launching a token on an existing blockchain or deploying their own, and that’s all they had to do but didn’t.
I submit that that would not be enough to make it not fraudulent.
> ok where is the block explorer and what consensus model does it use” because nobody exposed to onecoin first would ask that
Doesn't matter. What matters is who's shilling and how effective they are. Like Elon and Bitcoin.
It would still be a rip-off for purchasers, but it would have reduced their legal liability to nothing in the various countries involved. Then they could just squirm around securities laws based on how they marketed it, like everyone else.
Right?! All they had to do is fork an open-source cryptocurrency, and they couldn't even do that. It's hilarious. With the hype empire OneCoin controlled, it's quite possible that it could have astro-turfed its way to a bubble like those of bitcoin or dogecoin.
Ayman al-Zawahiri (the defacto “leader” of Al-queda today) could easily be in some back room hidden in Pakistan right now. He technically is not listed as dead either.
https://en.wikipedia.org/wiki/Ayman_al-Zawahiri
Stranger things have happened in our world.
It depends on how much these experts law enforcement people care too. A random IRS guy found the Silk Road guy, not some fancy investigation. The question is anyone in India, or where ever with corrupt police and military, are even looking hard for her.
You probably need someone like the Americans, UK, or Russians (see Shamil Basayev https://en.wikipedia.org/wiki/Shamil_Basayev) IRL to really care at this level.
Note: I haven’t listened to the podcast or deeply into her, just my point of view on that subject.
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For the Silk Road. That’s true. However the next two silk roads had the people arrested fairly quickly.
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Note: I don’t know much or anything about hiding out or disappearing.
In Al Qaeda's case the futility comes more from the vacuum in their niche.
https://www.nytimes.com/2015/12/27/business/dealbook/the-uns...
> "I can't discuss that. It starts to get very very very scary, very very very fast." According to Bjercke, Dr Ruja never expected OneCoin to grow so big. 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.
Even if you think you are going to get something and profit, one big reason to stay away from scams and fraud is that there are big players in the area that are 1. already established, 2. willing to do much worse things than you to get their way, 3. don't want someone else stepping on their territory. The mafia doesn't let petty thieves steal in their areas. You simply become a pawn to their schemes; then forced to do things you never anticipated having to do.
Also reminds me of the Inner Ring by CS Lewis [1]. Stay away from secret societies, fraud, corruption, and crime. There are some very bad people in the world with some very organized problems.
It's a much simpler life to just be an honest, unknown, middle class person.
> To a young person, just entering on adult life, the world seems full of “insides,” full of delightful intimacies and confidentialities, and he desires to enter them.
> But if he follows that desire he will reach no “inside” that is worth reaching.
This curiosity can lead us to some pretty dark corners of the world. Especially on the internet.
During the war in Yugoslavia a lot of records got lost and it is still common practice to reissue birth certificates based on some witness statements.
Do you want to get away with murder? Run away from debts and obligations? Why would we as society let you do that?
However, it becomes much murkier from a moral standpoint if you consider a scenario where you try to hide from a corrupt state for e.g. digging up dirt on a high ranking official. Or due to political, racial, religious oppression etc.
They completely change identities, new names, new passports, new looks, new citizenship. With enough money, it becomes just a routine thing. It is like they run a Tor network ring, but on personal identities.
Often, they are found when they get in trouble with their old pals (usually unsettled scores), and not the police.
Regarding sustainability, I'd say it depends a lot on what you're considering sustainable.
Both state-issue and Bitcoin might survive forever... It's just not the best for the common people who owns them, given they could've been using something that has a backing. Only time will tell.
People really want to believe. It reached a different group than Theranos, but the setup was the same.
Obviously, if there was no way to take money out/sell your shares, the valuation was completely bogus.
I was almost sucked into OC. Some non-tech friend in his mid-thirties approached me about it, he had already invested all his savings (~20k€ and another 10k€ from his mother).
He gave me OC's prep-talk and got me interested, so as an overpaid programmer within minutes I've concluded: Why not buy the biggest package or even more?
Hooked as I was, every piece of due dilligence I've tried to apply made the whole thing appear as a scam quickly. I've phoned with the BaFin (our financial authority) multiple times it took about a year afterwards for a very timid response against OC (in hindsight their lack of action in this case mirrors their lack of competence in the wirecard scam).
For me there are two major culprits:
1. OC leadership, especially Ruga
I think what makes OC so sinister is how they specifically targeted groups of people with low technical knowledge and who feel (and are) financially unskilled / underpriviledged. Once they've had to flee one country they've moved to another nation, again looking for underprivliged non-technical people.
The OC footsoldier's that I've met all came from Germany's lower classes (I guess most marketers are victims as well).
In Britain they've targeted mostly muslims. They went to India, China and so forth.
2. Financial Authorities
A scam that targeted small time investors (entry package was 500€; who often don't even know the name of their financial authority or what it does) highlights the importance of taking action for a BaFin: A fair society cannot treat predation of poor people differently that that of rich people. Swifter action whould have prevented a lot of the levels that pyramid eventually built up.
500€s or 5.000€s in damage apparently isn't much for the BaFin to do a lot (AFAIK none of the footsoldies I've met faced any criminal charges). But for the victims it often amounts to 100% of savings or even debt they took on, not even to mention ruined friendships, self-doubt, guilt etc. Ruga and the BaFin broke already broken people.
PS: I think Tim Tayshun's article (https://news.bitcoin.com/beware-definitive-onecoin-ponzi/) must have saved a lot of people from this!
I might also add: Wirecard as well as IOTA did most wreckage in Germany. Partly because their founders are German speaking. Partly because authorities are inept.
tbh I've spent waaay more time than I'd care to admit diving deep into onecoin over the past few years. It's really really really wild the more you dig. Happy to answer any questions.
2. Yell as loudly as you can for people to stop getting scammed. (They thing you're wrong, and you have no marketing budget to get your voice heard. It takes 10 units of energy to disprove bullshit and only 1 unit of energy to generate it. It's harder to convince people they've been scammed. This is also known as the curse of the duped.
3. Actively advertise superior investments with longer time horizons so that they don't have the money sitting in their hands to so easily be scammed out of. You can even generate a marketing budget to get eyes away from the scams onto the good things. (You will be yelled at by everyone that doesn't like what you built. Especially if its successful.)
As the winner of the "Golden Pump Award" for "Best New Scam" for "HEX", and as one of the first people in the world to be successfully sued for online spam, specifically the Viagra spam scheme that you ran from Panama (which you lost, under your previous name "Richard J Schueler"), you could personally solve scams by ceasing and desisting your shilling of HEX, and your recruiting of unsuspecting developers to work on it, and your illegal false claims of providing CDs (certificates of deposit).
Richard Hart (aka "Spam King" Richard J Schueler) wins the "Golden Pump Award" for "Best New Scam" for his POS shitcoin Ponzi scheme "HEX":
https://twitter.com/JuanSGalt/status/1233242355995750400
https://www.youtube.com/watch?time_continue=857&v=tf-lJu5iDh...
Peacefire.org beats spammers in court.
https://www.zdnet.com/article/peacefire-org-beats-spammers-i...
>Free-speech group Peacefire.org wins a legal round in its fight against unsolicited e-mail, invoking Washington state's anti-spam law.
>The King County District Court in Bellevue, Wash., on Monday granted Peacefire $1,000 in damages in each of three complaints filed by Peacefire Webmaster Bennett Haselton. The small-claims suit alleged that Red Moss Media, Paulann Allison and Richard Schueler [who now operates under the pseudonum "Richard Hart"] sent unsolicited commercial messages to Haselton that bore deceptive information such as a forged return e-mail address or misleading subject line.
Confronting Richard Heart of HEX - SPAM KING and Crypto Scammer
https://www.cointelligence.com/content/confronting-richard-h...
>During ANON Summit 2020, I participated in a “fireside chat” with Richard Heart, founder of HEX. HEX is one of the most sophisticated, if not THE most sophisticated scams I have ever seen.
>Why was I so aggressive with Richard? I have a lot of experience fighting with scammers, at events, and in online discussions. I’m familiar with their bullshit techniques. Richard is the sort of “master debater” who will answer a question without actually answering the content of the question. I watched more than 6 hours of his previous talks and learned how to tell when he was trying to avoid a real answer.
>If you don't want to sit through hours of interviews yourself, this 4 minute video not only sheds light on Heart's motivation for establishing HEX, but also shows just how abrasive and crude he can be. This video was not created or edited by Cointelligence.
https://www.youtube.com/watch?v=_MIdlXHedlU
>I want to draw your attention to the quote in the video above: "What am I going to make more money doing? Promoting my token, that I own a whole ton of? Or promoting bitcoin, where I own one-one zillionth of the available supply?" He's clearly in this to make money for himself in any way possible. [...]
>When asked why HEX was not categorized as a security, at around the 21 minute mark, Richard offered an explanation that has no legal grounding. On the website, HEX claims that it is "The first high interest blockchain certificate of deposit." However, HEX has no legal authority to issue CDs. Richard is illegally claiming to provide CDs when in fact the instruments are nothing but glorified savings accounts.
More quotes: "What's up now, f*ggot? What are you going to do now, you little b*tch? Get the fuck out of here! That's the dumbest piece of shit I've ever seen in my fucking life. [...] Let me give you some more bullshit, ok?" -Richard Heart aka Richard J Schueler
Richard Heart - Spam, ICOs, and Death Threats
https://imnotdead.co.uk/blog/richard-heart
Richard James Schueler - Friggin Spam King
https://web.archive.org/web/20190416235350/http://www.panama...
Why HEX is a Ponzi and not a solid investment (Part 2): Richard Heart
https://www.reddit.com/r/CryptoCurrency/comments/kwhjxa/why_...
>During the interview at ANON, Richard confirmed that he was one of the first people in the world to be sued for online spam, back in 2002. This shows us Richard has experience abusing unregulated markets, as he is doing with crypto these days.
Is this an accurate quote of your own words?
>When I pressed the matter and asked for a simple “yes” or “no” as to whether he, as the FOUNDER of HEX, knows who benefits from the funds sent to the “Origin Address” he flat-out said “I’m dodging your question.” Dodging the question! He proceeds to repeat “Dodge, dodge.”
Richard, your tag-line "Do you want to develop my new cryptocurrency?" is the new "Do you want to develop an app?"
https://www.youtube.com/watch?v=jVy0JWX5XEY&ab_channel=Adult...
"Dodge, dodge." -Richard Heart aka Richard J Schueler
Yeah, I can say the same about Catholic, Orthodox, Muslim and any other major religion in this world. Ever talked with any of these bigots? You want to run for the hills.
>For a long time, people have tried to create a form of digital money independent of state-backed currencies. But they have always failed because no-one could trust them. They would always need someone in charge who could manipulate the supply, and forgery was too easy.
There have been some rather successful attempts at creating digital money. E-gold, Liberty Reserve. The problem was never that someone might manipulate the supply, but censorship resistance. All the successful players in this space ended up getting shut down by governments, cryptocurrency solved this little detail.
Clearly they just regurgitated some cryptocurrency pitch without doing much fact checking.
It makes you wonder if the BBC author should have tried to explain what crypto was at such detail at all in the first place.
The 3 long technical paragraphs disrupt the narrative.
Just give some witty one or two lines for the luddites. I doubt they care about public internet databases anyway.