Ruja Ignatova’s security advisor Frank Schneider is on the run

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Businessmen and former spy Frank Schneider, who served as OneCoin mastermind Ruja Ignatova’s security advisor for two years, is missing and is sought after by the French judiciary.

Schneider, who previously told 100.7, “If it was fraud and money laundering, I must be responsible,” was arrested two years ago on behalf of U.S. authorities and previously described extradition to America as a “death sentence.” At age 53, Schneider faces up to 40 years in prison for his role in one of the most prolific digital currency scams in history.

It’s understood that the former intelligence officer had been living under house arrest with an electronic bracelet and that the French Prime Minister, Élisabeth Borne, had recently approved his extradition.

The OneCoin scam—what you need to know

OneCoin was a Ponzi scheme posing as a digital currency investment opportunity. Its promoter, Dr. Ruja Ignatova, promoted it between 2014 and 2017, promising speculators they would get rich by buying and holding what she called the “Bitcoin killer.”

Ignatova, aka The CryptoQueen, a Bulgarian national who had previously worked in the financial industry, lured victims in with coins and educational products, despite never launching a working blockchain in the several years the scam was operational.

While exact figures are still unknown, OneCoin is estimated to have fleeced three million people worldwide out of as much as $4.4 billion. After investigations into the company led to legal action and arrests, Ignatova disappeared and has not been seen since.

OneCoin was and still is one of the biggest regulatory failures in digital currency history. While some financial authorities published warnings about it, the lack of a globally applicable set of rules and coordinated action allowed OneCoin to continue for years.

Global regulations and enforcement are required

While there will always be some offshore hideaway that does not play by international rules and regulations, it’s crucial for the blockchain industry that existing financial laws are followed and that new ones are drafted to fill in any gaps. Where scams are uncovered, authorities worldwide must have the power to act swiftly and in unison to bring them down.

While the original Bitcoin was designed to comply with existing financial laws and regulations, authorities now have to deal with unregulated exchanges, so-called decentralized token exchanges, DAOs, unregistered security issuances, and other schemes, scams, and organizational structures.

While the existing rules cover most of what goes on in the industry, regulators across the globe need to get on the same page as far as enforcement is concerned. Countries with lackluster financial regulations must move quickly to fill the gaps lest they become havens for ‘crypto’ scams.

As for speculators, let OneCoin be a lesson; educate yourself on how this technology works and what its purpose is, heed the warnings of financial authorities in your jurisdiction, investigate anything you are going to speculate on thoroughly and look for opportunities to invest in real businesses building useful tools on scalable utility blockchains rather than speculating on token prices.

Had OneCoin supporters followed the simple advice above, a few million people would still have their hard-earned savings, and the OneCoin scammers would never have had the chance to become the infamous criminals they are known as today.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.