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 of 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, who defrauded up to 3.4 million investors worldwide through a global multi-level-marketing network. The operation, based in Sofia, Bulgaria, sold a fraudulent cryptocurrency through a network of promoters who solicited investments in exchange for purported tokens, despite not actually involving any cryptocurrencies or existing on a blockchain.
The scheme, deemed "one of the largest global fraud schemes in history" by the DOJ, collapsed in 2017 after Ignatova and her team were found to have manipulated the perceived value of OneCoin. In June 2024, the DOJ offered a $5 million reward for the missing Cryptqueen, while 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 lie disguised as cryptocurrency, costing victims over $4 billion worldwide." The DOJ has stated it will continue working to seize criminal proceeds and prioritize returning money to victims.
This development comes roughly four weeks after the FTX Recovery Trust announced it would distribute $2.2 billion to creditors in its fourth payout under the exchange's Chapter 11 plan, with earlier rounds totaling more than $6 billion as part of a process aimed at recovering assets for users of the once-prominent crypto trading platform, which collapsed in November 2022 and triggered a steep crypto bear market.