A $40 million compensation fund, comprising seized assets, has been established for victims of the $4 billion OneCoin cryptocurrency fraud scheme, as announced 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.
Up to 3.4 million investors worldwide were defrauded, with total investments exceeding $4 billion. The scheme, described as one of the largest global frauds in history, collapsed in 2017 after the founders were found to have artificially inflated the value of OneCoin.
In recent developments, a $5 million reward has been offered for information leading to the capture of the missing 'Cryptqueen', while Greenwood has admitted to federal wire fraud and money laundering charges. According to US Attorney Jay Clayton, the DOJ will continue to prioritize the seizure of criminal proceeds and the return of funds to victims. This compensation process follows the announcement by the FTX Recovery Trust to distribute $2.2 billion to creditors, as part of a broader effort to recover assets for users of the collapsed crypto trading platform.