A $40 million compensation fund, comprising seized assets, has been established for victims of the $4 billion OneCoin cryptocurrency scam, according to a recent announcement by the US Department of Justice. The scam, which ran from 2014 to 2019, was perpetrated by OneCoin Ltd. co-founders, including Ignatova and Karl Sebastian Greenwood, and affected up to 3.4 million investors globally.
The fraudulent scheme involved the sale of a fake cryptocurrency through a multinational multi-level marketing network, with investors losing over $4 billion. The operation was exposed as a ponzi scheme in 2017 after it was discovered that the value of OneCoin was artificially inflated through the automatic generation of new coins. In 2022, Greenwood admitted to federal wire fraud and money laundering charges, while a $5 million reward was offered for the capture of the missing 'Cryptqueen' in June 2024. The US Attorney for the Southern District of New York stated that the founders of OneCoin had deceived victims by selling a false cryptocurrency, resulting in losses exceeding $4 billion worldwide, and emphasized the DOJ's commitment to seizing criminal proceeds and returning funds to victims.
This development comes approximately four weeks after the FTX Recovery Trust announced plans to distribute $2.2 billion to creditors as part of its fourth payout under the exchange's Chapter 11 plan, which aims to recover assets for users of the collapsed crypto trading platform.