OneCoin Scam Victims to Receive $40 Million in Compensation Over a Decade After the Scheme Began

Those affected by the $4 billion OneCoin fraud scheme can now apply 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, OneCoin Ltd.

co-founders Ignatova and Karl Sebastian Greenwood, along with others, orchestrated a global cryptocurrency investment scam that deceived up to 3.4 million investors worldwide, according to the DOJ. The scheme, which was based in Sofia, Bulgaria, involved the sale of a fraudulent cryptocurrency through a global multi-level marketing network.

Investors from around the globe lost over $4 billion in the scam, which operated through a network of promoters offering investments in exchange for supposed tokens, despite not involving any actual cryptocurrencies or existing on a blockchain. The scheme, described by the DOJ as 'one of the largest global fraud schemes in history', collapsed in 2017 after Ignatova and her team were found to have artificially inflated OneCoin's value by automatically generating new coins. In June 2024, the DOJ offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen'. Greenwood, who allegedly referred to investors as 'idiots', pleaded guilty 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 false promise disguised as a cryptocurrency, resulting in losses of over $4 billion worldwide for victims.' Clayton also stated that the DOJ will continue to seize criminal proceeds and prioritize returning funds to victims. The compensation process for OneCoin victims comes approximately four weeks after the FTX Recovery Trust announced its plan to distribute $2.2 billion to creditors in its fourth payout under the exchange's Chapter 11 plan, with previous rounds totaling over $6 billion as part of efforts to recover assets for users of the crypto trading platform, which collapsed in November 2022 and triggered a significant crypto bear market.