More than a decade after the OneCoin scam began, victims of the $4 billion cryptocurrency fraud scheme are now eligible to receive compensation from a $40 million fund of seized assets, as announced by the US Department of Justice on Monday. Between 2014 and 2019, the co-founders of OneCoin Ltd., Ignatova and Karl Sebastian Greenwood, along with others, operated a global cryptocurrency investment scheme that defrauded up to 3.4 million investors worldwide, according to the DOJ. The scheme, which was based in Sofia, Bulgaria, involved the sale of a fraudulent cryptocurrency through a global multi-level marketing network. The operation duped investors out of over $4 billion worldwide by promising tokens that did not actually exist on any blockchain.
The scheme, described by the DOJ as 'one of the largest global fraud schemes in history,' collapsed in 2017 after Ignatova and her team were found to have artificially inflated the perceived value of OneCoin by automatically generating new coins. In June 2024, the DOJ offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen.' Greenwood, who allegedly referred to investors as 'idiots,' pleaded guilty to federal wire fraud and money laundering charges in 2022. According to US Attorney Jay Clayton for the Southern District of New York, 'OneCoin's founders peddled a false promise of cryptocurrency, resulting in losses of over $4 billion worldwide for victims.' The DOJ has stated that it will continue to work towards seizing criminal proceeds and prioritizing the return of funds to victims.
This development comes approximately four weeks after the FTX Recovery Trust announced plans to distribute $2.2 billion to creditors as part of its fourth payout under the exchange's Chapter 11 plan, with earlier rounds totaling over $6 billion in an effort to recover assets for users of the collapsed crypto trading platform.