More than a decade after the OneCoin $4 billion scam was initiated, victims can now apply for compensation from a $40 million fund comprising seized assets, as announced by the US Department of Justice on Monday. Between 2014 and 2019, Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd, along with other accomplices, orchestrated a global cryptocurrency investment scam that deceived up to 3.4 million investors worldwide, according to the DOJ. The Bulgaria-based operation marketed and sold a fake cryptocurrency through a global multi-level marketing network.
Investors from around the world lost over $4 billion to the fraudulent cryptocurrency, which functioned through a network of promoters who solicited investments in exchange for supposed tokens, despite not being linked to any actual cryptocurrency or blockchain. The scam, described by the DOJ as 'one of the largest global fraud schemes in history', collapsed in 2017 after Ignatova and her team were found to have artificially inflated OneCoin's perceived value 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'. 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 deceived victims by selling a false promise disguised as cryptocurrency, resulting in losses exceeding $4 billion worldwide.' Clayton also stated that the DOJ will continue to seize criminal proceeds and prioritize reimbursing victims. The compensation process for OneCoin victims 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, with previous rounds totaling over $6 billion in a bid to recover assets for users of the now-defunct crypto trading platform, which collapsed in November 2022 and triggered a severe crypto bear market.