More than a decade after the OneCoin scam began, victims can now apply for compensation from a $40 million fund of seized assets, as announced by the US Department of Justice. The international cryptocurrency investment scheme, which operated from 2014 to 2019, defrauded up to 3.4 million investors worldwide, with estimated losses of over $4 billion.
The scheme, led by co-founders Ignatova and Karl Sebastian Greenwood, involved a global multi-level-marketing network that sold a fraudulent cryptocurrency through a network of promoters. However, the cryptocurrency did not exist on any blockchain and did not involve actual cryptocurrencies. The scheme collapsed in 2017 after it was discovered that the founders had manipulated the perceived value of OneCoin by automatically 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 the missing Cryptqueen.
According to US Attorney Jay Clayton, the founders of OneCoin sold a false promise disguised as a cryptocurrency, resulting in losses of over $4 billion worldwide. The DOJ has stated that it will continue to seize criminal proceeds and prioritize returning money to the victims.
This development comes after the FTX Recovery Trust announced it would distribute $2.2 billion to creditors, as part of a process aimed at recovering assets for users of the collapsed crypto trading platform.