More than a decade after the OneCoin cryptocurrency scam began, victims are set to receive a $40 million lifeline, as announced by the US Department of Justice. The scheme, which defrauded up to 3.4 million investors worldwide, was operated by co-founders Ruja Ignatova and Karl Sebastian Greenwood between 2014 and 2019. The operation, based in Sofia, Bulgaria, used a global multi-level marketing network to sell a fraudulent cryptocurrency, with investors losing over $4 billion worldwide.
Notably, the scheme did not involve any actual cryptocurrencies and was not based on any blockchain. The scheme collapsed in 2017 after it was discovered that Ignatova and her team had manipulated the perceived value of OneCoin 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', Ruja Ignatova.
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 lie disguised as cryptocurrency, costing victims over $4 billion worldwide.' The DOJ has stated that it will continue to work to seize criminal proceeds and prioritize returning money to the victims. This development comes approximately four weeks after the FTX Recovery Trust announced plans to distribute $2.2 billion to creditors, as part of its fourth payout under the exchange's Chapter 11 plan, which aims to recover assets for users of the collapsed crypto trading platform.