More than a decade after the scam started, victims of the $4 billion OneCoin fraud scheme are now eligible for compensation from a $40 million fund of seized assets, according to an announcement by the US Department of Justice on Monday. Between 2014 and 2019, co-founders Ignatova and Karl Sebastian Greenwood, along with others, operated a global cryptocurrency investment scheme that deceived up to 3.4 million investors worldwide, as stated by the DOJ. The scheme, based in Sofia, Bulgaria, marketed and sold a fake cryptocurrency through a global multi-level-marketing network. Worldwide, victims invested over $4 billion in the fraudulent cryptocurrency, which was promoted by a network of promoters offering investments in exchange for supposed tokens, but did not involve any actual cryptocurrencies or blockchain.
The ponzi 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 manipulated the perceived value of OneCoin through automatic coin generation. In June 2024, the DOJ offered a $5 million reward for the missing Cryptqueen, while 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, causing losses of over $4 billion worldwide to victims". Clayton also stated that the DOJ would continue to seize criminal proceeds, prioritizing the return of money to victims. The compensation process for OneCoin victims comes approximately four weeks after the FTX Recovery Trust announced it would 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 a process to recover assets for users of the once-prominent crypto trading platform, which collapsed in November 2022 and triggered a steep crypto bear market.