The US Department of Justice has established a $40 million compensation fund for victims of the $4 billion OneCoin cryptocurrency scam, which is now available for those affected to claim. The international scheme, led by co-founders Ignatova and Karl Sebastian Greenwood, operated between 2014 and 2019, deceiving up to 3.4 million investors worldwide, according to the DOJ.
The Bulgaria-based operation used a multi-level marketing network to sell the fraudulent cryptocurrency, which did not actually exist on any blockchain and did not involve real cryptocurrency. The global Ponzi scheme collapsed in 2017 after Ignatova and her team were found to have artificially inflated the perceived value of OneCoin through automated coin generation. In June 2024, the DOJ announced a $5 million reward for information leading to the capture of the missing 'Cryptqueen'.
Meanwhile, 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, 'OneCoin's founders perpetrated a massive deception, masquerading a lie as a cryptocurrency and causing losses of over $4 billion worldwide.' The DOJ will continue to work towards seizing criminal proceeds and prioritizing restitution for 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 platform that collapsed in November 2022.