There is no single correct way to work out the size of a scam because it depends how you define the word “loss.” The obvious method is to calculate how much money was invested. This is called “real-world” loss. (Although this isn’t straightforward in Ponzi and pyramid schemes because early investors often make money.) There is a second way too, which is how much money investors thought they were owed. Although this is sometimes called “fictitious” loss, it can be just as keenly felt by victims.
Bernie Madoff’s Investment Securities is widely regarded as the biggest Ponzi of all time. His fund attracted 30,000 mostly high–net worth individuals or fund managers, who invested approximately $36 billion (€34 billion) in Madoff Securities. About half was paid back out as returns, leaving a total “real-world” loss of around $18 billion (€16 billion). When the Department of Justice finally made sense of the Madoff paperwork, they found that the money investors thought they were owed—the “fictitious” loss—was significantly higher. Possibly as much as $60 billion.
OneCoin’s precise real-world losses might never be known because much of it was never recorded. Based on internal accounting documents and the testimony of those involved, it’s possible to estimate that somewhere around €4–15 billion worth of packages were sold between late 2014 and late 2017. Roughly one third of that was paid back out in returns (either as sales commissions or via xcoinx.com), which places real-world losses at between €2.6 and €10 billion. That’s at least five times the size of Elizabeth Holmes’s notorious Theranos scam. Nick Leeson’s Barings Bank job… the infamous Bitconnect con… even Charles Ponzi’s postal coupon swindle—they all paled in comparison to what Ruja had pulled off. Only Bernie Madoff could match it.
Because of its pyramidal structure, however, Ruja scammed far more people than Madoff and they were less able to bear the loss. OneCoin really was shaped like a pyramid, with each layer from Crown Diamond down to Sapphire being deeper and wider than the one above. Only 50,000 or so ranked sellers actually profited from the scheme, and even that was skewed to those at the top: the roughly €1.4 billion that was paid out in commission and withdrawals went to just 5 percent of the investors, and the majority went to the 0.5 percent who were Diamond or above. Most of Ruja’s victims were not sellers. The pyramid’s true base was the roughly one million investors from 175 countries who bought packages but barely recruited anyone else at all—people like Christine Grablis or Layla Begum. Any commission they made was tiny, all they had was coins in their accounts whose returns would arrive when OneCoin finally went public. They were ordinary people from across the spectrum of life—Ugandan farmers, Scottish single moms, Japanese businessmen, Muslim scholars, American car dealers. It was mostly ordinary people who collectively lost almost €3 billion to a scam.
The fictitious losses for OneCoin investors can also be calculated, albeit very roughly. By the time Ruja was shouting down the phone at Gilbert in September 2017, OneCoin had created 21 billion coins on the new blockchain (plus the initial 2.1 billon from the first blockchain), each now worth €15.95 according to the OneCoin website. Although a certain amount had been turned back into cash via xcoinx, and a decent chunk may have been unallocated, there could have been as many as 20 billion OneCoin sitting in people’s accounts. Billions of coins, each worth €15.95 in the minds of investors. Each one as real to them as the money in their pockets.
It’s no wonder Ruja was nervous about the FBI. Bernie Madoff’s fictitious losses were around $60 billion (€57 billion). Ruja Ignatova probably owed investors over €100 billion. And it was growing every day.