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. Between 2014 and 2019, OneCoin's co-founders, Ignatova and Karl Sebastian Greenwood, along with others, orchestrated a global cryptocurrency investment scam that deceived up to 3.4 million investors worldwide, according to the DOJ.
The scheme, which was based in Sofia, Bulgaria, involved the sale of a fraudulent cryptocurrency through a global multi-level marketing network. Investors from around the globe lost over $4 billion in the scam, which operated by promising tokens but did not involve any actual cryptocurrencies or blockchain technology.
The scheme, described by the DOJ as 'one of the largest global fraud schemes in history,' collapsed in 2017 after it was discovered that Ignatova and her team had artificially inflated the perceived value of OneCoin by generating new coins. In June 2024, the DOJ offered a $5 million reward for information leading to the capture of 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 deceived victims by selling a false cryptocurrency, resulting in losses of over $4 billion worldwide.' The DOJ will continue to work towards seizing criminal proceeds and prioritizing the return of funds to victims.
The compensation process for OneCoin victims comes approximately four weeks after the FTX Recovery Trust announced plans to distribute $2.2 billion 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.