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 operated between 2014 and 2019, was led by OneCoin Ltd.
co-founders Ignatova and Karl Sebastian Greenwood, and involved the sale of a fraudulent cryptocurrency through a global multi-level marketing network. The operation, based in Sofia, Bulgaria, deceived 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 has 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 artificially inflated the value of OneCoin.
In 2022, Greenwood pleaded guilty to federal wire fraud and money laundering charges, and in June 2024, the DOJ offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen'. 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'. The DOJ will continue to work towards seizing criminal proceeds and prioritizing the reimbursement of victims. This development 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.