More than a decade after the OneCoin scam began, victims of the $4 billion cryptocurrency fraud can now apply 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 from 2014 to 2019, was led by co-founders Ruja Ignatova and Karl Sebastian Greenwood, who deceived up to 3.4 million investors worldwide through a multi-level marketing network. The fraudulent cryptocurrency, which did not exist on any blockchain, was sold globally through a network of promoters who promised tokens in exchange for investments.
The scheme collapsed in 2017 after it was discovered that Ignatova and her team had artificially inflated the value of OneCoin by generating new coins. 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 founders of OneCoin 'sold a lie disguised as cryptocurrency', resulting in losses of over $4 billion worldwide. The DOJ has pledged to continue seizing criminal proceeds to prioritize returning funds 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 efforts to recover assets for users of the collapsed crypto trading platform.