Those affected by the $4 billion OneCoin fraud can now apply for compensation from a $40 million fund composed of seized assets, as announced by the US Department of Justice on Monday. Between 2014 and 2019, OneCoin Ltd.
co-founders Ignatova and Karl Sebastian Greenwood, along with others, operated a global cryptocurrency investment scheme that defrauded approximately 3.4 million investors worldwide, according to the DOJ. The scheme, based in Sofia, Bulgaria, sold a fraudulent cryptocurrency through a global multi-level marketing network. Global investors lost over $4 billion to the fake cryptocurrency, which was promoted by a network of solicitors offering purported tokens but did not involve actual cryptocurrencies or blockchain technology. 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 OneCoin's value by generating new coins.
In June 2024, the DOJ offered a $5 million reward for information on 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 deceived victims with a false cryptocurrency, resulting in over $4 billion in losses worldwide.' Clayton also stated that the DOJ will continue to seize criminal proceeds and prioritize returning funds to victims. This development comes approximately four weeks after the FTX Recovery Trust announced its plan to distribute $2.2 billion to creditors in its fourth payout under the exchange's Chapter 11 plan, following previous rounds totaling over $6 billion as part of efforts to recover assets for users of the collapsed crypto trading platform.