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 of seized assets, as announced by the US Department of Justice. The scheme, which operated from 2014 to 2019, was perpetrated by OneCoin Ltd.
co-founders Ignatova and Karl Sebastian Greenwood, who deceived up to 3.4 million investors worldwide through a global multi-level-marketing network. The fraudulent cryptocurrency, marketed and sold by the Sofia, Bulgaria-based operation, accumulated over $4 billion in investments globally, despite not being a genuine cryptocurrency and not existing on any blockchain.
The scheme collapsed in 2017 after Ignatova and her team were found to have artificially inflated OneCoin's value. In a recent development, the DOJ has offered a $5 million reward for the capture of the missing Cryptqueen, while Greenwood has admitted to federal wire fraud and money laundering charges. 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 DOJ will continue to work towards seizing criminal proceeds and prioritizing the reimbursement of victims. This compensation process comes on the heels of the FTX Recovery Trust's announcement to distribute $2.2 billion to creditors, as part of its efforts to recover assets for users of the collapsed crypto trading platform.