A $40 million fund has been established from seized assets to provide compensation to victims of the $4 billion OneCoin cryptocurrency scam, as announced by the US Department of Justice. The international scheme, which operated between 2014 and 2019, defrauded up to 3.4 million investors globally. OneCoin's founders, including Ignatova and Karl Sebastian Greenwood, deceived investors through a global multi-level marketing network, selling a fraudulent cryptocurrency that did not exist on any blockchain.
After the scheme's collapse in 2017, the DOJ has been working to recover assets, with the latest development offering a lifeline to affected investors. The move comes as part of a broader effort to reclaim proceeds from the scam and prioritize restitution for victims, who lost over $4 billion worldwide. According to US Attorney Jay Clayton, 'OneCoin's founders peddled a false promise of cryptocurrency, resulting in losses exceeding $4 billion globally.' The DOJ will continue to pursue the recovery of criminal proceeds, ensuring that victims receive the compensation they deserve.
This announcement follows a recent $2.2 billion distribution to creditors by the FTX Recovery Trust, as part of its Chapter 11 plan to recover assets for users of the defunct crypto trading platform.