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. The scheme, which operated from 2014 to 2019, was perpetrated by OneCoin Ltd. co-founders Ignatova and Karl Sebastian Greenwood, and involved the sale of a fraudulent cryptocurrency through a global multi-level marketing network. The operation, based in Sofia, Bulgaria, amassed over $4 billion in investments from approximately 3.4 million investors worldwide, despite not being a genuine cryptocurrency and lacking a presence on any blockchain.
The scheme collapsed in 2017 after it was discovered that Ignatova and her team had artificially inflated the value of OneCoin by generating new coins. In 2022, Greenwood pleaded guilty to federal wire fraud and money laundering charges, and the DOJ has since offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen'.
US Attorney Jay Clayton stated that the founders of OneCoin 'sold a lie disguised as cryptocurrency', resulting in losses exceeding $4 billion worldwide, and assured that the DOJ will continue to seize criminal proceeds and prioritize restitution for victims. This development comes on the heels of the FTX Recovery Trust's announcement to distribute $2.2 billion to creditors, as part of its efforts to recover assets for users of the defunct crypto trading platform.