More than a decade after the inception of the notorious OneCoin scam, 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 OneCoin scheme, which was operational between 2014 and 2019, involved Ignatova, Karl Sebastian Greenwood, and other co-founders of OneCoin Ltd., who orchestrated a global cryptocurrency investment scam that deceived up to 3.4 million investors worldwide, according to the DOJ.
The Bulgaria-based operation utilized a multi-level marketing network to promote and sell a fraudulent cryptocurrency, amassing over $4 billion in investments globally. However, the scheme did not involve actual cryptocurrencies and was not listed on any blockchain. The operation collapsed in 2017 after Ignatova and her team were found to have artificially inflated the value of OneCoin through automated coin generation. The DOJ has described the scheme as 'one of the largest global fraud schemes in history.' In June 2024, the Department 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 peddled a false narrative disguised as cryptocurrency, resulting in losses exceeding $4 billion worldwide.' The DOJ has committed to continuing its pursuit of seized assets to compensate victims. This development 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, aiming to recover assets for users of the crypto trading platform that collapsed in November 2022.