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 from 2014 to 2019, was led by co-founders 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 ultimately collapsed in 2017 after it was discovered that OneCoin’s value was artificially inflated through the automatic generation of new coins.
The US Department of Justice has described the scheme as “one of the largest global fraud schemes in history”. In recent developments, a $5 million reward has been offered for information leading to the capture of the missing 'Cryptqueen', while Greenwood has admitted to federal wire fraud and money laundering charges. 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 development comes as the FTX Recovery Trust has announced plans to distribute $2.2 billion to creditors, as part of its efforts to recover assets for users of the collapsed crypto trading platform.