The US Department of Justice has established a $40 million compensation fund for victims of the $4 billion OneCoin cryptocurrency scam, which affected approximately 3.4 million investors globally between 2014 and 2019. The scheme, founded by Ignatova and Karl Sebastian Greenwood, involved a global multi-level marketing network that sold a fraudulent cryptocurrency. The operation, which did not involve actual cryptocurrencies or blockchain technology, collapsed in 2017 after the founders manipulated the perceived value of OneCoin.
In recent developments, the DOJ has offered a $5 million reward for information on the missing founder, while Greenwood has admitted to federal wire fraud and money laundering charges. The US Attorney for the Southern District of New York stated that the founders 'sold a lie disguised as cryptocurrency,' resulting in losses of over $4 billion worldwide.
The DOJ will continue to work towards seizing criminal proceeds and prioritizing victim compensation. This announcement comes as the FTX Recovery Trust prepares to distribute $2.2 billion to creditors, as part of a broader effort to recover assets for users of the collapsed crypto trading platform.