A $40 million fund has been established from seized assets for victims of the $4 billion OneCoin scam to claim compensation, as announced by the US Department of Justice. The international cryptocurrency investment scheme, which operated between 2014 and 2019, was led by co-founders Ignatova and Karl Sebastian Greenwood, and deceived up to 3.4 million investors worldwide. OneCoin Ltd., based in Sofia, Bulgaria, used a global multi-level marketing network to promote and sell a fake cryptocurrency. Worldwide, victims invested over $4 billion in the scheme, which did not involve actual cryptocurrency and was not listed on any blockchain.
The scheme collapsed in 2017 after Ignatova's team was found to have artificially inflated OneCoin's value by generating new coins. In 2022, Greenwood admitted to federal wire fraud and money laundering charges.
The US Department of Justice has described OneCoin as 'one of the largest global fraud schemes in history.' The DOJ is offering a $5 million reward for information on the missing 'Cryptqueen' and has stated its commitment to seizing further assets to compensate victims. 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 compensation process comes after the FTX Recovery Trust announced a $2.2 billion distribution to creditors, part of a larger effort to recover assets for users of the collapsed crypto trading platform.