Those affected by the $4 billion OneCoin fraud scheme are now eligible for compensation through a $40 million fund comprising seized assets, as announced by the US Department of Justice on Monday. Between 2014 and 2019, co-founders Ignatova and Karl Sebastian Greenwood, along with others, operated a global cryptocurrency investment scam that deceived up to 3.4 million investors worldwide, according to the DOJ. The scheme, based in Sofia, Bulgaria, involved marketing and selling a fraudulent cryptocurrency through a global multi-level marketing network. Global investors lost over $4 billion to the scam, which promised 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. Following a $5 million reward offered by the DOJ in June 2024 for information on the missing Cryptqueen, Greenwood admitted 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 sold a false cryptocurrency, resulting in losses of over $4 billion worldwide, and the DOJ will continue to seize illicit proceeds to prioritize restitution for victims.
This development comes approximately four weeks after the FTX Recovery Trust announced a $2.2 billion distribution to creditors as part of its fourth payout under the exchange's Chapter 11 plan, which aims to recover assets for users of the crypto trading platform that collapsed in November 2022, triggering a significant crypto bear market.