US Justice Department Starts Compensation Process for Victims of $4 Billion OneCoin Fraud

The US Justice Department has begun a compensation process for victims of the OneCoin cryptocurrency fraud, advancing follow-up measures in the long-running case.

Cointelegraph reported on April 14 that the department opened the process for victims of the roughly $4 billion OneCoin scam.

Compensation will be funded with assets forfeited from people involved in the case. About $40 million is currently available for distribution, the report said. Eligible claimants are investors who bought OneCoin between 2014 and 2019 and suffered net losses.

Jay Clayton, the US attorney for the Southern District of New York, called the process an important step toward returning money to victims. While full recovery may be impossible, recovering criminal proceeds and compensating victims remain top priorities, he added.

OneCoin was launched in Bulgaria in 2014 and spread rapidly by marketing itself as a cryptocurrency that could surpass Bitcoin. It was at one point touted as a leading digital asset by market value. Authorities later determined it had no real blockchain or practical use case, triggering investigations in multiple countries.

The Justice Department estimates the project stole about $4 billion from investors between 2014 and 2016, with roughly 3.5 million victims worldwide. Some estimates put total losses as high as $19 billion.

Co-founder Karl Sebastian Greenwood was sentenced to 20 years in prison in September 2023. Another founder, Ruja Ignatova, has been missing since 2017. She is on the FBI's Ten Most Wanted Fugitives list, with a reward of up to $5 million for information leading to her capture.