More than a decade after the onset of the $4 billion OneCoin fraud, victims can now apply for compensation from a $40 million fund comprising seized assets, as announced by the US Department of Justice on Monday. The scheme, which operated between 2014 and 2019, was led by co-founders Ignatova and Karl Sebastian Greenwood, and involved an international cryptocurrency investment scam that defrauded up to 3.4 million investors worldwide.
Based in Sofia, Bulgaria, the operation promoted and sold a fraudulent cryptocurrency through a global multi-level marketing network. Investors globally lost over $4 billion to the scam, which was marketed as a cryptocurrency but did not actually involve any cryptocurrencies or exist on a blockchain. The scheme collapsed in 2017 after it was discovered that Ignatova and her team manipulated the perceived value of OneCoin by automatically generating new coins.
The US Department of Justice has termed it 'one of the largest global fraud schemes in history.' 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 sold a lie disguised as cryptocurrency, resulting in losses of over $4 billion for victims worldwide.' The DOJ has pledged to continue seizing criminal proceeds and prioritize reimbursing victims.
This development comes roughly 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, with earlier rounds totaling over $6 billion as part of efforts to recover assets for users of the crypto trading platform that collapsed in November 2022.