A $40 million compensation fund has been established for victims of the $4 billion OneCoin cryptocurrency scam, according to a recent announcement by the US Department of Justice. The scheme, which operated from 2014 to 2019, was led by co-founders Ruja Ignatova and Karl Sebastian Greenwood, 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 losses 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 2022, Greenwood pleaded guilty to federal wire fraud and money laundering charges, and a $5 million reward was offered for information leading to the capture of Ignatova in 2024.
According to US Attorney Jay Clayton, the founders of OneCoin 'sold a lie disguised as a cryptocurrency,' resulting in losses of over $4 billion worldwide. The DOJ has stated that it will continue to work towards seizing criminal proceeds and prioritizing the return of funds to victims.
This development comes on the heels of the FTX Recovery Trust's announcement that it would distribute $2.2 billion to creditors, as part of a broader effort to recover assets for users of the failed cryptocurrency trading platform.