The U.S. Department of Justice announced Monday that victims of the $4 billion OneCoin fraud scheme can now apply for compensation through a $40 million fund of seized assets.
Between 2014 and 2019, co-founders Ruja Ignatova and Karl Sebastian Greenwood operated an international investment scheme that defrauded up to 3.4 million investors globally.
Based in Sofia, Bulgaria, the operation used a multi-level marketing network to sell a fraudulent cryptocurrency that never actually existed on a blockchain.
A massive global scam
The DOJ described the operation as one of the largest global fraud schemes in history. The scheme collapsed in 2017 after investigators found that the founders manipulated the perceived value of OneCoin by automatically generating new coins.
U.S. Attorney Jay Clayton for the Southern District of New York said the founders "sold a lie disguised as cryptocurrency, costing victims more than $4 billion worldwide."
Clayton added that the DOJ will continue working to seize further criminal proceeds and prioritize returning money to the defrauded investors.
One of the scheme's leaders, Karl Sebastian Greenwood, admitted to federal wire fraud and money laundering charges in 2022. He allegedly referred to the scheme's investors as "idiots" during the operation.
Co-founder Ruja Ignatova, known as the "Cryptoqueen," remains a fugitive. The DOJ recently increased the reward for her capture to $5 million in June 2024.
This compensation move follows recent large-scale creditor payouts from the FTX Recovery Trust. The FTX trust recently announced a $2.2 billion distribution to creditors as part of its bankruptcy recovery process.
