More than a decade after the inception of the OneCoin scam, victims of the $4 billion cryptocurrency fraud scheme are now eligible for compensation from a $40 million fund comprised of seized assets, as announced by the US Department of Justice. The scheme, which operated from 2014 to 2019, was led by co-founders Ignatova and Karl Sebastian Greenwood, and involved the marketing and sale of a fraudulent cryptocurrency through a global multi-level marketing network. Approximately 3.4 million investors worldwide were defrauded, with total investments exceeding $4 billion.
The scheme, which was deemed 'one of the largest global fraud schemes in history' by the DOJ, collapsed in 2017 after it was discovered that the value of OneCoin was artificially inflated through the automatic generation of new coins. In 2022, Greenwood pleaded guilty to federal wire fraud and money laundering charges, and a $5 million reward was offered for the capture of the missing 'Cryptqueen' in June 2024. According to US Attorney Jay Clayton, the founders of OneCoin 'sold a lie disguised as cryptocurrency,' resulting in losses of over $4 billion for victims worldwide.
The DOJ has stated that it will continue to seize criminal proceeds and prioritize the recovery of funds for victims. This development comes on the heels of the FTX Recovery Trust's announcement that it would distribute $2.2 billion to creditors, marking the fourth payout under the exchange's Chapter 11 plan, with total payouts exceeding $6 billion.