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 US 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 globally through a multi-level marketing network. The fraudulent cryptocurrency, which did not exist on any blockchain, was sold through a network of promoters who solicited investments in exchange for purported tokens.
The scheme collapsed in 2017 after it was discovered that Ignatova and her team had manipulated the perceived value of OneCoin. In 2022, Greenwood admitted to federal wire fraud and money laundering charges, and in June 2024, the DOJ offered a $5 million reward for the missing Cryptqueen. According to US Attorney Jay Clayton, "OneCoin's founders sold a lie disguised as cryptocurrency, costing victims more than $4 billion worldwide." The DOJ will continue to work towards seizing criminal proceeds and prioritizing the return of funds to victims.
This development comes after the FTX Recovery Trust announced its plan to distribute $2.2 billion to creditors, marking the fourth payout under the exchange's Chapter 11 plan, with earlier rounds totaling over $6 billion.