OneCoin Scam Victims to Receive $40 Million in Restitution Over a Decade After the Scheme Began

Those affected by the $4 billion OneCoin fraud 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, OneCoin Ltd. co-founders Ignatova and Karl Sebastian Greenwood, along with others, orchestrated a global cryptocurrency investment scam that deceived up to 3.4 million investors worldwide, according to the DOJ. The scheme, based in Sofia, Bulgaria, promoted and sold a counterfeit cryptocurrency through a global multi-level marketing network.

Investors from around the globe lost over $4 billion to the fraudulent cryptocurrency, which operated through a network of promoters offering investments in exchange for supposed tokens, but did not involve actual cryptocurrencies or exist on any blockchain. The ponzi scheme, deemed 'one of the largest global fraud schemes in history' by the DOJ, 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 sold a false promise disguised as cryptocurrency, resulting in losses of over $4 billion worldwide for victims.' Clayton also stated that the DOJ will continue to seize criminal proceeds and prioritize returning funds to victims. The compensation process for OneCoin victims comes approximately four weeks after the FTX Recovery Trust announced its plans to distribute $2.2 billion to creditors in its fourth payout under the exchange's Chapter 11 plan, with previous rounds totaling over $6 billion as part of efforts to recover assets for users of the crypto trading platform, which collapsed in November 2022 and triggered a severe crypto bear market.