More than a decade after the OneCoin scam started, victims of the $4 billion cryptocurrency fraud can now apply for compensation from a $40 million fund of seized assets, as announced by the US Department of Justice on Monday. The international scheme, which operated between 2014 and 2019, was led by co-founders Ignatova and Karl Sebastian Greenwood, and involved the marketing and sale of a fake cryptocurrency through a global multi-level marketing network. The operation, based in Sofia, Bulgaria, duped up to 3.4 million investors worldwide, who invested over $4 billion in the fake cryptocurrency.
Notably, the scheme did not involve any actual cryptocurrencies and was not listed on any blockchain. The DOJ described the scheme as 'one of the largest global fraud schemes in history', which collapsed in 2017 after Ignatova and her team were found to have manipulated the perceived value of OneCoin. In June 2024, the DOJ offered a $5 million reward for the missing 'Cryptqueen'. Greenwood admitted 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, costing victims over $4 billion worldwide.' The DOJ will continue to seize criminal proceeds and prioritize returning money to the victims. The compensation process comes roughly 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, which aims to recover assets for users of the once-prominent crypto trading platform that collapsed in November 2022.