Victims of the OneCoin $4 billion fraud scheme can now seek compensation through a $40 million seized asset fund, the US Department of Justice (DOJ) announced Monday.
Between 2014 and 2019, Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd. (OneCoin), and others an international cryptocurrency investment scheme that defrauded up to 3.4 million investors from around the world, the DOJ said.
The Sofia, Bulgaria-based operation marketed and sold a fraudulent crypto of the same name through a global multi-level marketing (MLM) network.
Victims worldwide invested over $4 billion worldwide in the fraudulent cryptocurrency, which operated through a network of promoters who solicited investments in exchange for purported tokens, but notably did not involve any cryptocurrencies, nor did OneCoin exist on any blockchain.
The Ponzi scheme, which the DOJ called “one of the largest global fraud schemes in history”, collapsed in 2017 after Ignatova and her team were found to have manipulated OneCoin’s perceived value through the automatic generation of new coins.
In June 2024, the DOJ offered a new $5 million reward for the missing Cryptqueen. Greenwood, who reportedly called the investors “idiots,” pleaded guilty in 2022 to federal fraud and money laundering charges.
“OneCoin’s founders sold a lie disguised as cryptocurrency, costing victims more than $4 billion worldwide,” said U.S. Attorney Jay Clayton for the Southern District of New York. He also said the DOJ would continue to work to seize proceeds of criminals and prioritize getting money back into the hands of victims.
The compensation process for OneCoin comes about four weeks after FTX Recovery Trust announced it would distribute $2.2 billion to creditors in its fourth payment under the exchange’s Chapter 11 plan. Earlier rounds totaled more than $6 billion as part of a process aimed at recovering assets for users of the once-prominent crypto trading platform, which collapsed in November 2022, triggering a steep crypto bear market.
