Over a decade after the OneCoin scam began, victims are now eligible for compensation from a $40 million fund comprising seized assets, as announced by the US Department of Justice. The scheme, which ran from 2014 to 2019, was a global cryptocurrency investment scam orchestrated by OneCoin Ltd. co-founders, including Ignatova and Karl Sebastian Greenwood, deceiving up to 3.4 million investors worldwide. The operation, based in Sofia, Bulgaria, sold a fake cryptocurrency through a multi-level marketing network, with investors losing over $4 billion.
Notably, the scheme did not involve actual cryptocurrencies or blockchain technology. The DOJ has described it as one of the largest global fraud schemes in history. After the scheme collapsed in 2017 due to the manipulation of OneCoin's value, the DOJ has been working to seize assets and compensate victims. In 2022, Greenwood admitted to federal wire fraud and money laundering charges.
The US Attorney for the Southern District of New York stated that the founders sold a false cryptocurrency, resulting in losses of over $4 billion worldwide, and emphasized the DOJ's commitment to seizing criminal proceeds and returning funds to victims. This development comes shortly after the FTX Recovery Trust announced its plan to distribute $2.2 billion to creditors, as part of its efforts to recover assets for users of the collapsed crypto trading platform.