More than a decade after the inception of the OneCoin scam, victims of the $4 billion cryptocurrency fraud scheme are now eligible for compensation from a $40 million fund comprising seized assets, as announced by the US Department of Justice. The scheme, which was operational from 2014 to 2019, involved co-founders Ignatova and Karl Sebastian Greenwood, who defrauded approximately 3.4 million investors worldwide through a global multi-level-marketing network. The operation, based in Sofia, Bulgaria, sold a fraudulent cryptocurrency through a network of promoters who solicited investments in exchange for purported tokens, despite the fact that the cryptocurrency did not exist on any blockchain and did not involve actual cryptocurrencies. 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.
Following the collapse, the DOJ offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen' in June 2024. 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 sold a lie disguised as cryptocurrency, resulting in losses exceeding $4 billion worldwide.' The DOJ has pledged to continue working to seize criminal proceeds, with the primary goal of returning funds to the 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, which aims to recover assets for users of the crypto trading platform that collapsed in November 2022, triggering a significant downturn in the crypto market.