Those affected by the $4 billion OneCoin scam are now eligible for compensation from a $40 million fund comprised of seized assets, as announced by the US Department of Justice on Monday. Between 2014 and 2019, co-founders Ignatova and Karl Sebastian Greenwood, along with others, orchestrated a global cryptocurrency investment scheme that deceived up to 3.4 million investors worldwide, according to the DOJ. The Bulgaria-based operation used a global multi-level marketing network to sell a fraudulent cryptocurrency.
Investors from around the globe lost over $4 billion to the scheme, which operated through a network of promoters offering investments in exchange for purported tokens, but notably did not involve actual cryptocurrencies or a blockchain. The scheme, described by the DOJ as one of the largest global frauds in history, collapsed in 2017 after Ignatova and her team were found to have artificially inflated OneCoin's value. In June 2024, the DOJ offered a $5 million reward for the missing Cryptqueen, while Greenwood admitted 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, costing victims over $4 billion worldwide.' The DOJ will continue to seize criminal proceeds and prioritize returning funds to victims. This development comes roughly four weeks after the FTX Recovery Trust announced plans to distribute $2.2 billion to creditors, marking the fourth payout under the exchange's Chapter 11 plan, which aims to recover assets for users of the collapsed crypto trading platform.