A $40 million compensation fund has been established for victims of the $4 billion OneCoin cryptocurrency scam, the US Department of Justice announced. The scheme, which operated from 2014 to 2019, defrauded up to 3.4 million investors worldwide.
OneCoin's founders, including Ignatova and Karl Sebastian Greenwood, orchestrated a global multi-level marketing network that sold a fake cryptocurrency, resulting in losses of over $4 billion. The scheme collapsed in 2017 after it was discovered that the perceived 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. US Attorney Jay Clayton stated that the DOJ would continue to seize criminal proceeds and prioritize returning funds to 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.