The U.S. Department of Justice has established a $40 million compensation fund for victims of the $4 billion OneCoin fraud scheme, using seized assets. The scheme, which operated between 2014 and 2019, was an international cryptocurrency investment scam led by Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd. It is estimated that up to 3.4 million investors worldwide were defrauded.
The scheme involved the sale of a fake cryptocurrency through a global multi-level marketing network, with investors losing over $4 billion. The operation collapsed in 2017 after it was discovered that the value of OneCoin was artificially inflated.
The Department of Justice has described the scheme as 'one of the largest global fraud schemes in history.' In 2022, Greenwood admitted to federal wire fraud and money laundering charges. The DOJ has vowed to continue seizing criminal proceeds to prioritize restitution for victims. This development comes after the FTX Recovery Trust announced a $2.2 billion distribution to creditors, as part of its efforts to recover assets for users of the collapsed crypto trading platform.