A $40 million compensation fund, comprising seized assets, has been established for victims of the $4 billion OneCoin cryptocurrency fraud, as announced by the US Department of Justice. The scheme, which operated from 2014 to 2019, involved Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd., and other individuals who orchestrated a global cryptocurrency investment scam, deceiving up to 3.4 million investors worldwide. OneCoin, based in Sofia, Bulgaria, sold a fraudulent cryptocurrency through a multi-level marketing network, with investors worldwide losing over $4 billion.
The scheme collapsed in 2017 after Ignatova and her team were found to have artificially inflated OneCoin's value. Following the collapse, the DOJ has been working to seize assets and compensate victims.
In a statement, US Attorney Jay Clayton for the Southern District of New York noted that OneCoin's founders had sold a false promise of cryptocurrency, resulting in losses of over $4 billion globally. The DOJ will continue to prioritize the recovery of assets and the distribution of funds to victims. This development comes as the FTX Recovery Trust has announced plans to distribute $2.2 billion to creditors, marking the fourth payout under the exchange's Chapter 11 plan, with previous rounds totaling over $6 billion in an effort to recover assets for users of the collapsed crypto trading platform.