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 comprised of seized assets, as announced by the US Department of Justice on Monday. The international scheme, which operated from 2014 to 2019, was led by co-founders Ignatova and Karl Sebastian Greenwood, and involved the sale of a fraudulent cryptocurrency through a global multi-level marketing network.
With up to 3.4 million investors defrauded worldwide, the scheme, deemed one of the largest global fraud schemes in history, saw victims invest over $4 billion globally in the fake cryptocurrency. The scheme's collapse in 2017 was precipitated by the discovery that OneCoin's value was artificially inflated through the automatic generation of new coins.
Following the DOJ's offer of a $5 million reward for information on the missing Cryptqueen in June 2024, and Greenwood's admission to federal wire fraud and money laundering charges in 2022, the US Attorney for the Southern District of New York emphasized the DOJ's commitment to seizing criminal proceeds and returning funds to victims. The launch of the compensation process comes on the heels of the FTX Recovery Trust's announcement to distribute $2.2 billion to creditors, marking the fourth payout under the exchange's Chapter 11 plan, which has thus far totalled over $6 billion in asset recovery for users of the collapsed crypto trading platform.