Victims of OneCoin’s $4 billion fraud scheme can now seek compensation through a $40 million fund of seized assets, the US Department of Justice (DOJ) announced on Monday.
Between 2014 and 2019, Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd. (OneCoin), and others operated an international cryptocurrency investment scheme that defrauded up to 3.4 million investors around the world, the Justice Department said.
The Sofia, Bulgaria-based operation marketed and sold a fraudulent cryptocurrency with the same name through a global multi-level marketing (MLM) network.
Victims around the world invested more than $4 billion in the fraudulent cryptocurrency that operated through a network of promoters, who solicited investments in exchange for supposed tokens, but notably, it did not actually involve any cryptocurrency nor did OneCoin exist on any blockchain.
The Ponzi scheme, which the Department of Justice called “one of the largest global fraud schemes in history,” collapsed in 2017, after it was discovered that Ignatova and her team had manipulated the perceived value of OneCoin by automatically generating new coins.
In June 2024, the Department of Justice offered a new reward of $5 million for the missing Cryptqueen. Greenwood, who allegedly called investors “idiots,” admitted to federal wire fraud and money laundering charges in 2022.
“The founders of OneCoin 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 Justice Department would continue to work to confiscate the proceeds of crime and prioritize returning money to 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. Previous rounds totaled more than $6 billion as part of a process aimed at recovering assets for users of the once-prominent cryptocurrency trading platform, which collapsed in November 2022, triggering a pronounced cryptocurrency bear market.
