The US Department of Justice has established a $40 million compensation fund for victims of the $4 billion OneCoin fraud scheme, which can now be accessed by those affected. The scheme, which operated between 2014 and 2019, involved co-founders Ignatova and Karl Sebastian Greenwood deceiving up to 3.4 million investors worldwide through a global multi-level marketing network.
Based in Sofia, Bulgaria, the operation sold a fake cryptocurrency through a network of promoters who solicited investments in exchange for supposed tokens, despite not involving any actual cryptocurrencies or blockchain. The scheme, described by the DOJ as 'one of the largest global fraud schemes in history', collapsed in 2017 after Ignatova and her team were found to have artificially inflated OneCoin's value by generating new coins. In 2022, Greenwood admitted to federal wire fraud and money laundering charges, and in June 2024, the DOJ offered a $5 million reward for information on the missing 'Cryptqueen'. US Attorney Jay Clayton stated that OneCoin's founders 'sold a lie disguised as cryptocurrency, costing victims over $4 billion worldwide' and emphasized the DOJ's commitment to seizing criminal proceeds and prioritizing victim reimbursement.
This development comes approximately four weeks after the FTX Recovery Trust announced its plan to distribute $2.2 billion to creditors as part of its fourth payout under the exchange's Chapter 11 plan, with previous rounds totalling over $6 billion in an effort to recover assets for users of the collapsed crypto trading platform.