More than a decade after the OneCoin scam began, victims are set to receive compensation from a $40 million fund comprising seized assets, as announced by the US Department of Justice. The international cryptocurrency investment scheme, which defrauded up to 3.4 million investors globally, was operated by Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd., between 2014 and 2019. The scheme involved marketing and selling a fraudulent cryptocurrency through a global multi-level-marketing network, with victims worldwide investing over $4 billion. The operation was found to be a ponzi scheme, with the perceived value of OneCoin being manipulated through the automatic generation of new coins.
The scheme collapsed in 2017, and in June 2024, a $5 million reward was offered for the missing Cryptqueen. Greenwood admitted to federal wire fraud and money laundering charges in 2022. According to US Attorney Jay Clayton, the founders of OneCoin sold a false cryptocurrency, resulting in losses of over $4 billion worldwide. The DOJ will continue to seize criminal proceeds and prioritize returning money to the victims.
This development comes after the FTX Recovery Trust announced it would distribute $2.2 billion to creditors, as part of a process to recover assets for users of the crypto trading platform that collapsed in November 2022.