A $40 million compensation fund, comprising seized assets, has been established for victims of the $4 billion OneCoin cryptocurrency fraud scheme, as announced by the US Department of Justice. The scheme, which operated between 2014 and 2019, was led by Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd, and involved the sale of a fraudulent cryptocurrency through a global multi-level marketing network. Approximately 3.4 million investors worldwide were defrauded, with total investments exceeding $4 billion. The scheme collapsed in 2017 after it was discovered that the value of OneCoin was artificially inflated through the automatic generation of new coins.
In recent developments, the DOJ has offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen' and has secured admissions of federal wire fraud and money laundering charges from Greenwood. According to US Attorney Jay Clayton, the founders of OneCoin 'sold a lie disguised as cryptocurrency', resulting in losses of over $4 billion worldwide. The DOJ has pledged to continue seizing criminal proceeds and prioritizing the return of funds to victims. This compensation process follows the recent announcement by the FTX Recovery Trust that it will distribute $2.2 billion to creditors as part of its fourth payout under the exchange's Chapter 11 plan, which aims to recover assets for users of the collapsed crypto trading platform.