More than a decade after the OneCoin scam began, victims are set to receive a $40 million lifeline, courtesy of seized assets secured by the US Department of Justice. The OneCoin scheme, which defrauded up to 3.4 million investors of over $4 billion between 2014 and 2019, was operated by co-founders Ignatova and Karl Sebastian Greenwood through a global multi-level-marketing network. The scheme, which was marketed as a cryptocurrency investment opportunity, was in fact a fraudulent operation that did not involve any actual cryptocurrencies or blockchain technology.
The DOJ has described the scheme as "one of the largest global fraud schemes in history". In 2017, the scheme collapsed after it was discovered that Ignatova and her team had manipulated the perceived value of OneCoin through the automatic generation of new coins.
In 2022, Greenwood admitted to federal wire fraud and money laundering charges. The US Attorney for the Southern District of New York, Jay Clayton, stated that the DOJ would continue to work to seize criminal proceeds and prioritize returning money to victims.
The compensation process comes after the FTX Recovery Trust announced plans to distribute $2.2 billion to creditors, as part of a larger effort to recover assets for users of the collapsed crypto trading platform.