More than a decade after the OneCoin scam was initiated, victims of the $4 billion cryptocurrency fraud scheme are now eligible for compensation through a $40 million fund comprised of seized assets, as announced by the US Department of Justice on Monday. Between 2014 and 2019, Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd., along with other individuals, 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 marketing and sale of a fraudulent cryptocurrency through a global multi-level marketing network.
Investors from around the world lost over $4 billion to the fraudulent cryptocurrency, which was promoted by a network of individuals who solicited investments in exchange for purported tokens, despite the fact that it did not involve any actual cryptocurrencies and was not listed on any blockchain. The ponzi scheme, described by the DOJ as 'one of the largest global fraud schemes in history,' collapsed in 2017 after it was discovered that Ignatova and her team had manipulated 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 sold a false promise disguised as a cryptocurrency, resulting in losses of over $4 billion worldwide for victims.' Clayton also stated that the DOJ would continue to seize criminal proceeds and prioritize returning funds to victims. The compensation process for OneCoin victims 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 previous rounds totaling over $6 billion as part of efforts to recover assets for users of the once-prominent crypto trading platform, which collapsed in November 2022 and triggered a significant crypto bear market.