More than a decade after the OneCoin scam began, 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 on Monday. The international scheme, which operated between 2014 and 2019, was led by Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd, and involved the marketing and sale of a fraudulent cryptocurrency through a global multi-level-marketing network.
Up to 3.4 million investors worldwide were defrauded, with total investments exceeding $4 billion. The scheme, which did not actually involve any cryptocurrencies or blockchain, collapsed in 2017 after the founders were found to have manipulated the perceived value of OneCoin. In 2022, Greenwood admitted to federal wire fraud and money laundering charges, and a $5 million reward was offered for the capture of the missing Cryptqueen in June 2024. According to US Attorney Jay Clayton, the founders of OneCoin sold a false promise disguised as a cryptocurrency, resulting in losses of over $4 billion worldwide.
The DOJ has stated that it will continue to seize criminal proceeds and prioritize returning funds to the victims. This development comes shortly after the FTX Recovery Trust announced plans to distribute $2.2 billion to creditors, as part of a larger effort to recover assets for users of the collapsed crypto trading platform.