A $40 million fund has been established from seized assets to provide compensation for victims of the $4 billion OneCoin cryptocurrency scam, 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 fake cryptocurrency through a global multi-level marketing network, deceiving up to 3.4 million investors worldwide.
The operation, based in Sofia, Bulgaria, did not involve any actual cryptocurrency or blockchain, and saw investors lose over $4 billion. The scheme collapsed in 2017 after it was discovered that the value of OneCoin was artificially inflated through automated coin generation.
In 2022, Greenwood admitted to federal wire fraud and money laundering charges, and a $5 million reward was offered for the capture of the missing 'Cryptqueen' in June 2024. According to US Attorney Jay Clayton, the founders of OneCoin 'sold a lie disguised as cryptocurrency', resulting in losses of over $4 billion worldwide, and the DOJ will continue to prioritize the recovery of assets for victims. This development comes after the FTX Recovery Trust announced plans to distribute $2.2 billion to creditors, as part of a larger effort to recover assets for users of the collapsed crypto trading platform.