A $40 million fund has been established from seized assets for victims of the $4 billion OneCoin cryptocurrency scam, according to a recent announcement by the US Department of Justice. Between 2014 and 2019, co-founders Ignatova and Karl Sebastian Greenwood, along with others, orchestrated a global investment scheme that defrauded up to 3.4 million investors worldwide. The scheme, based in Sofia, Bulgaria, involved marketing and selling a fraudulent cryptocurrency through a global multi-level marketing network.
Investors from around the world lost over $4 billion to the scam, which did not actually involve any cryptocurrencies and was not listed on any blockchain. The scheme, described by the DOJ as one of the largest global frauds in history, collapsed in 2017 after Ignatova and her team were found to have artificially inflated the value of OneCoin by generating new coins. In June 2024, the DOJ offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen'.
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 for the Southern District of New York, 'OneCoin's founders perpetrated a massive deception, selling a false promise of cryptocurrency and causing losses of over $4 billion worldwide.' Clayton also stated that the DOJ will continue to seize ill-gotten gains and prioritize returning funds to victims. The compensation process for OneCoin victims comes approximately four weeks after the FTX Recovery Trust announced plans to distribute $2.2 billion to creditors in its fourth payout under the exchange's Chapter 11 plan.
Previous rounds have totalled over $6 billion, aimed at recovering assets for users of the crypto trading platform that collapsed in November 2022, triggering a significant crypto market downturn.