A decade after the onset of the OneCoin scam, victims of the $4 billion cryptocurrency fraud scheme are now eligible for compensation from a $40 million fund comprising seized assets, as announced by the US Department of Justice on Monday. Between 2014 and 2019, co-founders Ignatova and Karl Sebastian Greenwood, along with others, orchestrated a global cryptocurrency investment scam through OneCoin Ltd., duping up to 3.4 million investors worldwide, according to the DOJ. The scheme, which was based in Sofia, Bulgaria, involved the marketing and sale of a fraudulent cryptocurrency through a multi-level marketing network.
Investors from around the globe lost over $4 billion to the scam, which did not involve actual cryptocurrencies and was not listed on any blockchain. The scheme, described by the DOJ as one of the largest global frauds in history, collapsed in 2017 after Ignatova and her team were found to have artificially inflated the value of OneCoin by generating new coins.
Following the collapse, the DOJ has been working to seize assets and bring perpetrators to justice. In June 2024, a $5 million reward was offered 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 peddled a false narrative disguised as cryptocurrency, resulting in losses exceeding $4 billion worldwide.' The DOJ has pledged to continue seizing criminal proceeds and prioritizing the return of funds to victims. This development comes roughly 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.