More than a decade after the OneCoin scam began, the US Department of Justice has announced that victims can now seek compensation from a $40 million fund of seized assets. The international cryptocurrency investment scheme, which operated between 2014 and 2019, is estimated to have defrauded up to 3.4 million investors worldwide out of over $4 billion.
Co-founders Ignatova and Karl Sebastian Greenwood, along with others, marketed and sold a fraudulent cryptocurrency through a global multi-level-marketing network. The scheme, described by the DOJ as 'one of the largest global fraud schemes in history', collapsed in 2017 after it was discovered that the founders had artificially inflated the value of OneCoin. In 2022, Greenwood admitted to federal wire fraud and money laundering charges, and the DOJ is continuing to work to seize further criminal proceeds to compensate victims.
According to US Attorney Jay Clayton, 'OneCoin's founders sold a lie disguised as cryptocurrency, costing victims more than $4 billion worldwide.' The compensation process comes as the FTX Recovery Trust has announced plans to distribute $2.2 billion to creditors, part of a larger effort to recover assets for users of the collapsed crypto trading platform.