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 comprising seized assets, as announced by the US Department of Justice on Monday. The scheme, which operated between 2014 and 2019, involved co-founders Ignatova and Karl Sebastian Greenwood deceiving up to 3.4 million investors worldwide through a global multi-level-marketing network.
The Bulgaria-based operation sold a fake cryptocurrency, amassing over $4 billion in investments globally, despite not being a legitimate cryptocurrency and not existing on any blockchain. The scheme collapsed in 2017 after it was discovered that Ignatova and her team had artificially inflated the value of OneCoin by generating new coins.
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, the DOJ will continue to seize proceeds from the scam and prioritize returning funds to victims.
This development comes shortly after the FTX Recovery Trust announced plans to distribute $2.2 billion to creditors, as part of its efforts to recover assets for users of the collapsed crypto trading platform.