More than a decade after the OneCoin scam began, victims can now apply for compensation from a $40 million fund of seized assets, as announced by the US Department of Justice. Between 2014 and 2019, the co-founders of OneCoin, Ignatova and Karl Sebastian Greenwood, operated a global cryptocurrency investment scheme that defrauded up to 3.4 million investors worldwide, resulting in losses of over $4 billion. The scheme, which was marketed and sold through a multi-level-marketing network, involved the sale of a fraudulent cryptocurrency that did not exist on any blockchain.
The DOJ has described the scheme as one of the largest global fraud schemes in history. After the scheme collapsed in 2017, the DOJ has been working to seize criminal proceeds, with the aim of returning money to the victims.
In a statement, US Attorney Jay Clayton said that the founders of OneCoin had sold a lie disguised as cryptocurrency, and that the DOJ would continue to prioritize getting money back to the victims. The compensation process comes after the FTX Recovery Trust announced it would distribute $2.2 billion to creditors, as part of a process aimed at recovering assets for users of the collapsed crypto trading platform.