More than a decade after the OneCoin scam began, victims of the $4 billion cryptocurrency fraud scheme are now eligible for compensation from a $40 million fund of seized assets, as announced by the U.S. Department of Justice. The scheme, which operated from 2014 to 2019, was led by co-founders Ignatova and Karl Sebastian Greenwood, who defrauded up to 3.4 million investors worldwide through a global multi-level-marketing network.
The Bulgaria-based operation sold a fraudulent cryptocurrency through a network of promoters, who solicited investments in exchange for purported tokens, but did not actually involve any cryptocurrencies or blockchain technology. The scheme, deemed one of the largest global fraud schemes in history, collapsed in 2017 after Ignatova and her team were found to have artificially inflated OneCoin's value. In 2022, Greenwood admitted to federal wire fraud and money laundering charges. According to U.S.
Attorney Jay Clayton, 'OneCoin's founders perpetrated a massive deception, masquerading as a cryptocurrency and causing losses of over $4 billion worldwide.' The DOJ has committed to continuing its efforts to seize criminal proceeds and prioritize returning funds to the victims. This development comes approximately four weeks after the FTX Recovery Trust announced its plans to distribute $2.2 billion to creditors, as part of its Chapter 11 plan to recover assets for users of the collapsed crypto trading platform.