More than a decade after the OneCoin scam started, victims of the $4 billion fraud scheme can now apply for compensation from a $40 million fund of seized assets, as announced by the U.S. Department of Justice on Monday.
The scheme, which was operated by co-founders Ruja Ignatova and Karl Sebastian Greenwood between 2014 and 2019, defrauded up to 3.4 million investors worldwide. The operation, based in Sofia, Bulgaria, sold a fake cryptocurrency through a global multi-level marketing network. Investors from around the globe lost over $4 billion in the fraudulent scheme, which did not involve any actual cryptocurrencies and was not listed on any blockchain.
The scheme collapsed in 2017 after Ignatova and her team were found to have artificially inflated the value of OneCoin by generating new coins. In June 2024, the DOJ offered a $5 million reward for information leading to the capture of the missing Ignatova, who has been dubbed the 'Cryptqueen'. Greenwood, who allegedly referred to investors as 'idiots', pleaded guilty to federal wire fraud and money laundering charges in 2022. According to U.S.
Attorney Jay Clayton for the Southern District of New York, 'OneCoin's founders deceived victims by selling a false promise of cryptocurrency, resulting in losses of over $4 billion worldwide'. Clayton also stated that the DOJ will continue to seize criminal proceeds and prioritize returning funds to the victims.
The compensation process for OneCoin victims comes approximately four weeks after the FTX Recovery Trust announced it would distribute $2.2 billion to creditors in its fourth payout under the exchange's Chapter 11 plan, with earlier rounds totaling over $6 billion as part of efforts to recover assets for users of the collapsed crypto trading platform.