More than a decade after the OneCoin scam began, victims of the $4 billion cryptocurrency fraud scheme can now apply for compensation from a $40 million fund comprising seized assets, as announced by the US Department of Justice on Monday. The scheme, which operated between 2014 and 2019, was led by Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd, and involved the sale of a fake cryptocurrency through a global multi-level marketing network.
Up to 3.4 million investors worldwide lost over $4 billion to the scam, which was eventually exposed as a Ponzi scheme in 2017. The DOJ has described it as 'one of the largest global fraud schemes in history'.
In 2022, Greenwood admitted to federal wire fraud and money laundering charges, and in June 2024, the DOJ offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen'. According to US Attorney Jay Clayton for the Southern District of New York, the founders of OneCoin 'sold a lie disguised as cryptocurrency', resulting in losses of over $4 billion worldwide. The DOJ has pledged to continue seizing criminal proceeds and prioritizing the return of funds to victims. This development 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, which aims to recover assets for users of the collapsed crypto trading platform.