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 comprising seized assets, as announced by the US Department of Justice on Monday. The scheme, which was operational from 2014 to 2019, involved Ignatova, Karl Sebastian Greenwood, and other co-founders of OneCoin Ltd., who orchestrated an international cryptocurrency investment scam that deceived up to 3.4 million investors globally. The Bulgaria-based operation employed a global multi-level-marketing network to market and sell the fraudulent cryptocurrency.
Investors from around the world lost over $4 billion to the scheme, which did not actually involve any cryptocurrencies and was not listed on any blockchain. The scheme collapsed in 2017 after it was discovered that Ignatova and her team had manipulated the perceived value of OneCoin by automatically generating new coins. The US Department of Justice has described the scheme as 'one of the largest global fraud schemes in history.' 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 sold a false narrative disguised as a cryptocurrency, resulting in losses of over $4 billion worldwide for victims.' The DOJ has pledged to continue 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 its 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.