A $40 million compensation fund has been established for victims of the $4 billion OneCoin cryptocurrency scam, the US Department of Justice announced. The scheme, which operated from 2014 to 2019, defrauded up to 3.4 million investors worldwide. OneCoin's founders, including Ignatova and Karl Sebastian Greenwood, perpetrated the fraud through a global multi-level marketing network, selling a fake cryptocurrency that did not exist on any blockchain. The scheme collapsed in 2017 after it was discovered that the founders had artificially inflated the value of OneCoin.
The DOJ has stated that it will continue to seize assets and prioritize returning funds to victims. This development comes after the DOJ offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen' and Greenwood's admission to federal wire fraud and money laundering charges in 2022. The compensation process begins as the FTX Recovery Trust prepares to distribute $2.2 billion to creditors, marking the latest effort to recover assets for users affected by major cryptocurrency scandals.