Jay Clayton, the U.S. Attorney for Manhattan, said the compensation process represented "an important step toward returning funds to those harmed."
Crypto News
The U.S. Department of Justice has begun accepting compensation claims from victims of OneCoin, a cryptocurrency fraud that collected more than $4 billion from investors before collapsing.
The Justice Department announced Monday that more than $40 million in forfeited assets is available for distribution to anyone who purchased OneCoin between 2014 and 2019 and recorded a net loss. Jay Clayton, the U.S. Attorney for Manhattan, said the compensation process represented "an important step toward returning funds to those harmed."
OneCoin was founded by Ruja Ignatova and Karl Sebastian Greenwood in Bulgaria and began operating in the United States around 2015. The project was marketed with the stated goal of surpassing Bitcoin, and it briefly rose to become the second-largest cryptocurrency by market capitalization. The scheme unraveled after users discovered the coins had no utility, and authorities in multiple countries launched investigations.
The Justice Department estimates the scheme stole more than $4 billion from roughly 3.5 million victims between 2014 and the end of 2016. Some independent estimates place total worldwide losses as high as $19 billion. Prior to its collapse, central banks in Latvia, Sweden, and Norway had warned investors that the project carried the hallmarks of a Ponzi scheme.
"Between 2014 and 2019, OneCoin's founders sold a lie disguised as cryptocurrency, costing victims more than $4 billion worldwide," Clayton said. He added that the office would continue working to seize criminal proceeds and return funds to victims.
Bulgarian police raided OneCoin's headquarters in 2018 and arrested Greenwood. He was sentenced to 20 years in prison in September 2023.
Victims who purchased OneCoin during the eligible window and wish to submit a claim can do so through the compensation process now open through the Justice Department. The $40 million available represents recovered assets from individuals prosecuted in connection with the scheme and falls well short of the estimated total losses.
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