The OneCoin Ponzi scheme begins restitution, with the U.S. Department of Justice setting aside $40 million to compensate victims

A shocking OneCoin cryptocurrency Ponzi scheme that stunned the world has, after years of legal proceedings, recently shown a glimmer of hope. The U.S. Department of Justice announced that it will provide $40 million to compensate investors who suffered losses between 2014 and 2019. This fraud scheme, involving 3.5 million people worldwide, took in about $4 billion. After the founder, Ignatova, disappeared in 2017, her whereabouts have remained unknown. She is currently listed among the FBI’s Ten Most Wanted Fugitives, with a bounty as high as $5 million.

How did OneCoin set up the scheme to harm people?

OneCoin was founded in 2014 by Ignatova (Ruja Ignatova). Its operating model was to sell “Trader Packages” of various tiers by using Multi-Level Marketing (MLM). The founder told investors that these packages could be used for “mining.” However, investigations show that all OneCoin data is hosted on a centralized server within the company, not on-chain decentralized assets. Investors can only make small transactions within a restricted closed system and cannot redeem them in the public market. In essence, it uses FOMO to lure the public into putting up money. Interestingly, the script used at OneCoin’s MLM brainwashing events—things like sales tactics about building an ecosystem chain, and saying that funds on the chain would be put into charity, financial investments, technology, entertainment, education, and other projects—is very similar to the grand promises made in many meme-coin pitches today. It’s practically a playbook for crypto scam groups.

OneCoin’s criminal co-conspirators are gradually arrested

“Scamming” the world and across multiple countries, OneCoin triggered a joint operation by law enforcement agencies in many places that has lasted for years. After co-founder Karl Sebastian Greenwood was arrested in Thailand in 2018, he was extradited to the United States, and he was subsequently sentenced to 20 years in prison and $300 million in compensation. In addition, lawyers Mark S. Scott and William Morro, who helped with money laundering, were also hit with judicial sanctions in turn. Aside from the United States, countries including Bulgaria, Germany, Italy, India, and China have issued injunctions or arrested related individuals, showing the tremendous damage the case caused to the global financial system and prompting the International Criminal Police Organization (Interpol) to take the matter very seriously and launch cooperation.

The founder “Crypto Queen” vanishes, and the FBI issues a wanted notice

The key figure of the case, the “Crypto Queen” Ignatova, has been out of sight since after October 2017. At that time, OneCoin was facing pressure to allow redemption. She missed the Portugal Lisbon meeting that she was supposed to attend, flew from Sofia, Bulgaria to Athens, Greece, and has been missing since then. In 2023, the Federal Bureau of Investigation placed her on its list of the “Ten Most Wanted Fugitives,” raising the bounty to $5 million. Although most of her other co-conspirators have already been imprisoned, the mastermind’s absence makes it difficult to determine where the $4 billion funds went. Law enforcement agencies are still closely monitoring potential locations where she might be hiding.

This article, “The OneCoin Ponzi scheme begins restitution, with the U.S. Department of Justice setting aside $40 million to compensate victims,” first appeared on ChainNews ABMedia.