Victims of the multi-billion-dollar OneCoin fraud can now apply for reimbursement through a federal compensation program funded by seized assets.
Summary
- The Justice Department has opened a reimbursement program using $40 million in seized assets to compensate investors who lost money in the OneCoin Ponzi scheme.
- Federal prosecutors estimate that the fraudulent cryptocurrency project stole at least $4 billion from millions of victims before its collapse and the subsequent sentencing of co-founder Karl Sebastian Greenwood.
The U.S. Department of Justice announced Monday that over $40 million in forfeited funds has been set aside for investors who suffered net losses from the cryptocurrency scheme between 2014 and 2019.
U.S. Attorney for Manhattan Jay Clayton described the initiative as “an important step toward returning funds to those harmed.”
Federal prosecutors revealed that the scheme, founded in Bulgaria by Ruja Ignatova and Karl Sebastian Greenwood, defrauded approximately 3.5 million people of more than $4 billion.
While some independent estimates suggest global losses could be as high as $19 billion, the DOJ’s current recovery efforts focus on assets clawed back from the project’s architects.
OneCoin was marketed as a “Bitcoin killer,” eventually becoming one of the largest digital assets by market cap before collapsing when investors realized the tokens lacked any actual utility or underlying technology.
“Between 2014 and 2019, OneCoin’s founders sold a lie disguised as cryptocurrency, costing victims more than $4 billion worldwide,” Clayton said.
“While no recovery can fully undo the damage, our Office will continue working to seize criminal proceeds and prioritize getting money back into the hands of victims.”
The project faced early scrutiny from central banks in Latvia, Sweden, and Norway, which issued public warnings identifying it as a potential Ponzi scheme long before the 2018 raid on its Bulgarian headquarters.
Following that investigation, Greenwood was apprehended and subsequently sentenced to 20 years in federal prison in late 2023.
Ignatova, the self-styled “Cryptoqueen,” remains at large after vanishing in October 2017 following a flight to Athens, Greece. She currently occupies a spot on the FBI’s Ten Most Wanted list, with a $5 million reward offered for information that results in her arrest.
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