The US Department of Justice announced that victims of the $4 billion OneCoin cryptocurrency fraud may seek compensation from a $40 million seized fund. This statement is seen as a new window of hope for the victims after the incident in which hundreds of thousands of people were victimized globally.
4 billion dollar giant fraud
OneCoin was offered as a cryptocurrency investment founded and managed by Ruja Ignatova and Karl Sebastian Greenwood between 2014 and 2019. OneCoin Ltd., headquartered in Sofia, the capital of Bulgaria, has managed to reach 3.4 million investors thanks to its multi-level marketing network around the world.
The company claimed that it was selling a cryptocurrency bearing its name and ostensibly as an investment vehicle. However, in a large-scale investigation conducted by the Ministry of Justice, it was revealed that OneCoin is a fake asset that does not actually exist on any blockchain and is not actually traded in the market.
OneCoin’s global launch was driven through a series of “promoters” working to attract new investors to its network. So-called cryptocurrency tokens were distributed in return for the investments collected through these people, but there was no real cryptocurrency infrastructure.
Collapse and criminal process
The Department of Justice called OneCoin “one of the largest global fraud schemes in history.” By 2017, it was determined that Ignatova and her team were producing new fake coins with the help of software and manipulating the apparent value of OneCoin, and the system collapsed.
Karl Sebastian Greenwood, one of the founders, pleaded guilty to wire fraud and money laundering crimes in the United States in 2022. It was also noted that Greenwood used statements that humiliated his own investors. The other founder, Ruja Ignatova, has still not been caught; In June 2024, the Justice Department announced a new $5 million reward for information leading to his capture.
“The founders of OneCoin made victims around the world lose more than $4 billion by hiding behind a fake cryptocurrency.” Prosecuting Attorney for the Southern District of New York, Jay Clayton, stated that priority will be given to returning the proceeds of crime to the victims.
Domino effect in the crypto world
After the large-scale losses in OneCoin, trust in crypto assets was shaken on a global scale. In particular, it remains a matter of curiosity how investors will access their funds in the new period and how much of their losses they will be able to recover.
The compensation application of OneCoin victims also sets an example for similar bankruptcy processes in the cryptocurrency industry. Recently, after the bankruptcy of the major crypto exchange FTX, a total refund of $ 8.2 billion was announced for users, initially $ 6 billion and then another $ 2.2 billion.
According to experts, examples such as OneCoin and FTX increase the need for regulation in crypto and may lead to strengthening investor protection and transparency in the sector.
