A $40 million fund has been established from seized assets to compensate victims of the $4 billion OneCoin cryptocurrency fraud, as announced by the US Department of Justice. The international 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 multi-level-marketing network. The fraudulent operation, touted as a cryptocurrency investment opportunity, did not actually involve any cryptocurrencies or blockchain technology.
After collapsing in 2017, the scheme was deemed 'one of the largest global fraud schemes in history' by the DOJ. Following the recent offer of a $5 million reward for the missing 'Cryptqueen' in June 2024, and Greenwood's admission to federal wire fraud and money laundering charges in 2022, the DOJ has reaffirmed its commitment to seizing criminal proceeds and prioritizing victim compensation. US Attorney Jay Clayton stated that OneCoin's founders 'sold a lie disguised as cryptocurrency, costing victims over $4 billion worldwide.' The compensation process for OneCoin victims comes as the FTX Recovery Trust prepares to distribute $2.2 billion to creditors, marking the fourth payout under the exchange's Chapter 11 plan, with earlier rounds exceeding $6 billion in the effort to recover assets for users of the collapsed crypto trading platform.