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. The scheme, which operated from 2014 to 2019, was perpetrated by OneCoin Ltd. co-founders Ignatova and Karl Sebastian Greenwood, who deceived up to 3.4 million investors worldwide through a global multi-level-marketing network.
The fraudulent cryptocurrency, which was marketed and sold by the Sofia, Bulgaria-based operation, did not actually involve any cryptocurrencies and was not listed on any blockchain. Instead, the scheme relied on a network of promoters who solicited investments in exchange for purported tokens. The DOJ has described the scheme as "one of the largest global fraud schemes in history", which collapsed in 2017 after Ignatova and her team were found to have artificially inflated OneCoin's value.
In 2022, Greenwood admitted to federal wire fraud and money laundering charges, and in June 2024, the DOJ offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen'. According to US Attorney Jay Clayton for the Southern District of New York, the DOJ will continue to prioritize the seizure of criminal proceeds and the distribution of funds to victims. This development comes as the FTX Recovery Trust has announced plans to distribute $2.2 billion to creditors, marking the fourth payout under the exchange's Chapter 11 plan, which aims to recover assets for users of the crypto trading platform that collapsed in November 2022.