Victims of the $4 billion OneCoin fraud scheme can now seek relief through a fund of $40 million in seized assets, the U.S. Department of Justice (DOJ) announced Monday.
Between 2014 and 2019, Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd. (OneCoin), and others operated a fraudulent international cryptocurrency investment scheme to up to 3.4 million investors 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 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 purported tokens, but notably did not involve any cryptocurrency and OneCoin did not exist on any blockchain.
The Ponzi scheme, which the DOJ 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 through the automatic generation of new coins.
In June 2024, the DOJ offered a new $5 million reward 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 of the Southern District of New York. He also said the DOJ would continue to work to seize the proceeds of crime and prioritize getting money back into the hands of victims.
The compensation process for OneCoin comes about four weeks after the FTX Recovery Trust announced it would distribute $2.2 billion to creditors in its fourth installment under the exchange’s Chapter 11 plan. Previous rounds totaled more than $6 billion in a process to recover user assets of the defunct crypto trading platform, which collapsed in November 2022, triggering a crypto bear market.
