DOJ Initiates Victim Restitution Program for $4B OneCoin Cryptocurrency Scheme
Victims of the OneCoin cryptocurrency fraud who experienced net financial losses from 2014 through 2019 can now access more than $40 million in compensation being distributed by the US Department of Justice.
A victim compensation initiative has been initiated by the US Department of Justice for individuals defrauded by OneCoin, the $4 billion cryptocurrency Ponzi operation, utilizing confiscated funds seized from key figures behind the fraudulent enterprise.
On Monday, the Justice Department announced that upwards of $40 million in seized and forfeited assets would be made available to provide restitution to any individual who made OneCoin purchases during the period spanning 2014 to 2019 and experienced a net financial loss.
Manhattan US Attorney Jay Clayton characterized the compensation initiative as "an important step toward returning funds to those harmed."
The OneCoin platform made its debut in 2014 with ambitious claims of overtaking Bitcoin (BTC), and notwithstanding its ascent to the position of second-largest digital currency measured by market capitalization, the project ultimately fell apart when participants realized the tokens possessed no actual value or functionality, prompting regulatory authorities across the globe to launch inquiries into the scheme.
"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."
OneCoin co-founder disappeared, another gets 20 years
Ruja Ignatova and Karl Sebastian Greenwood established OneCoin in Bulgaria, with operations commencing in the United States approximately in 2015.
According to Justice Department assessments, the fraudulent scheme extracted over $4 billion from approximately 3.5 million victims during the timeframe from 2014 through the conclusion of 2016. Nevertheless, certain calculations place global losses as high as $19 billion.
Before OneCoin's ultimate demise, multiple central banking institutions, including the regulatory authorities in Latvia, Sweden and Norway, issued warnings advising investors to avoid the cryptocurrency, identifying it as a potential Ponzi scheme.
Law enforcement officials from Bulgaria ultimately conducted a raid on OneCoin's main offices in 2018, resulting in Greenwood's arrest.
In September 2023, he received a prison sentence of 20 years for his participation in the fraudulent operation.
The last confirmed sighting of Ignatova occurred in 2017, when she boarded an aircraft bound for Athens. She currently appears on the FBI's "Ten Most Wanted Fugitives" list, with the federal agency providing a $5 million reward for information that results in her apprehension and conviction.