More than a decade after the OneCoin scam began, victims of the $4 billion fraud scheme are now eligible for compensation from a $40 million fund of seized assets, as announced by the US Department of Justice on Monday. The international cryptocurrency investment scheme, which operated from 2014 to 2019, was led by co-founders Ignatova and Karl Sebastian Greenwood, and involved the marketing and sale of a fraudulent crypto through a global multi-level-marketing network.
The scheme, which defrauded up to 3.4 million investors worldwide, did not actually involve any cryptocurrencies and did not exist on any blockchain. After collapsing in 2017, the DOJ has been working to seize assets and bring those responsible to justice.
In a recent development, the DOJ has offered a $5 million reward for the capture of the missing 'Cryptqueen' and Greenwood has admitted to federal wire fraud and money laundering charges. According to US Attorney Jay Clayton, 'OneCoin's founders sold a false promise disguised as cryptocurrency, resulting in losses of over $4 billion worldwide.' The DOJ will continue to work towards seizing criminal proceeds and prioritizing the return of funds to victims.
This compensation process comes on the heels of the FTX Recovery Trust's announcement to distribute $2.2 billion to creditors, as part of a larger effort to recover assets for users of the crypto trading platform that collapsed in November 2022.