A $40 million compensation fund has been established for victims of the $4 billion OneCoin cryptocurrency scam, according to a recent announcement by the US Department of Justice. The scheme, which operated from 2014 to 2019, was led by co-founders Ignatova and Karl Sebastian Greenwood and involved the sale of a fraudulent cryptocurrency through a global multi-level marketing network.
Approximately 3.4 million investors worldwide were defrauded, with total investments exceeding $4 billion. The scam collapsed in 2017 after it was discovered that the value of OneCoin had been artificially inflated through automated coin generation. The DOJ has characterized the scheme as one of the largest global frauds in history.
In 2022, Greenwood pleaded guilty to federal wire fraud and money laundering charges, and a $5 million reward is currently being offered for information leading to the capture of the missing 'Cryptqueen'. US Attorney Jay Clayton stated that the DOJ will continue to prioritize seizing criminal proceeds and returning funds to victims. This development comes as the FTX Recovery Trust prepares to distribute $2.2 billion to creditors as part of its Chapter 11 plan, following the collapse of the crypto trading platform in November 2022.