More than a decade after the inception of the OneCoin scam, victims can now apply for compensation from a $40 million fund comprised of seized assets, as announced by the US Department of Justice. The OneCoin cryptocurrency scheme, which was operated by Ignatova and Karl Sebastian Greenwood between 2014 and 2019, is reported to have defrauded up to 3.4 million investors worldwide, with total investments exceeding $4 billion. The scheme involved the sale of a fraudulent cryptocurrency through a multi-level marketing network, with promoters soliciting investments in exchange for purported tokens.
However, the scheme did not involve any actual cryptocurrencies and was not listed on any blockchain. The scheme collapsed in 2017 after it was discovered that Ignatova and her team had manipulated the perceived value of OneCoin by automatically generating new coins. The US Department of Justice has described the scheme as 'one of the largest global fraud schemes in history.' In 2022, Greenwood admitted to federal wire fraud and money laundering charges, and a $5 million reward was offered for information leading to the capture of Ignatova in 2024.
According to US Attorney Jay Clayton, the founders of OneCoin 'sold a lie disguised as cryptocurrency,' resulting in losses of over $4 billion for victims worldwide. The Department of Justice has stated that it will continue to work towards seizing criminal proceeds and prioritizing the return of funds to victims.
This development comes shortly 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, which aims to recover assets for users of the crypto trading platform that collapsed in November 2022.