U.S. Department of Justice Announces Compensation Program for OneCoin Victims
In a significant announcement on Monday, the U.S. Department of Justice revealed a new federal compensation program aimed at reimbursing victims of the notorious OneCoin fraud. This initiative comes as a relief to individuals who suffered losses from the fraudulent cryptocurrency scheme, which operated between 2014 and 2019. Over $40 million has been allocated from forfeited assets for this purpose, addressing the hardships faced by an estimated 3.5 million defrauded investors.
“This is a crucial move towards reimbursing those who have been harmed,”
stated U.S. Attorney for Manhattan Jay Clayton.
Background on OneCoin
OneCoin, a cryptocurrency founded by Ruja Ignatova and Karl Sebastian Greenwood in Bulgaria, defrauded investors of more than $4 billion, although some assessments place the total amount lost globally at an alarming $19 billion. The scheme, initially promoted as a potential rival to Bitcoin, gained immense popularity before it ultimately collapsed when many investors discovered that it did not possess any real underlying technology or utility.
Magnitude of the Deceit
Clayton emphasized the magnitude of the deceit, noting,
“Between 2014 and 2019, OneCoin’s founders sold a lie disguised as cryptocurrency, costing victims more than $4 billion worldwide.”
He assured the public that the Justice Department would persist in its efforts to recover illicit gains and restore some financial relief to the victims.
Legal Actions and Ongoing Investigations
The fraudulent activities of OneCoin had raised red flags early on, prompting central banks in Latvia, Sweden, and Norway to issue warnings and label it a potential Ponzi scheme before the Bulgarian headquarters was raided in 2018. Following this crackdown, Karl Sebastian Greenwood was arrested and later sentenced to 20 years in prison in late 2023. Meanwhile, Ruja Ignatova, who styled herself as the “Cryptoqueen,” remains a fugitive since she disappeared after a flight to Athens, Greece, in October 2017. She is currently featured on the FBI’s Ten Most Wanted list, with authorities offering a $5 million reward for any information leading to her capture.
