OneCoin victims get a $40 million lifeline more than a decade after the scam began

The Department of Justice said it has $40 million in seized assets for victim compensation and it will continue working to seize further criminal proceeds for the defrauded investors

What to know:

• Victims of the $4 billion OneCoin fraud can now apply for compensation from a $40 million fund of seized assets established by the U.S. Department of Justice.
• OneCoin, co-founded by fugitive "Cryptoqueen" Ruja Ignatova and Karl Sebastian Greenwood, defrauded as many as 3.4 million investors worldwide through a fake cryptocurrency that never operated on a blockchain.
• The compensation process follows the sentencing of several OneCoin figures and comes weeks after the FTX Recovery Trust announced additional multibillion-dollar payouts to its own creditors.

Victims of the OneCoin $4 billion fraud scheme can now seek compensation through a $40 million fund of seized assets, the U.S. 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 defrauding up to 3.4 million investors from around the globe, the DOJ said.

The Sofia, Bulgaria-based operation marketed and sold a fraudulent crypto by 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 return for purported tokens, but notably did not actually 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 allegedly called the investors “idiots”, admitted to federal wire fraud and money laundering charges in 2022.

“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 working to seize criminal proceeds and prioritize getting money back into the hands of victims.

The compensation process for OneCoin 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. Earlier rounds totalled 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.

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