A $40 million compensation fund has been established for victims of the OneCoin cryptocurrency scam, which is estimated to have defrauded over 3.4 million investors of more than $4 billion worldwide. The US Department of Justice made the announcement, revealing that the fund consists of seized assets from the perpetrators. OneCoin's founders, including Ruja Ignatova and Karl Sebastian Greenwood, orchestrated a global multi-level marketing scheme that sold a fake cryptocurrency through a network of promoters.
The scheme, which operated from 2014 to 2019, did not involve any actual cryptocurrencies and was instead a ponzi scheme that relied on the automatic generation of new coins to manipulate its perceived value. The DOJ has described OneCoin as 'one of the largest global fraud schemes in history', and has offered a $5 million reward for information leading to the capture of Ignatova, who remains at large. Greenwood has already admitted to federal wire fraud and money laundering charges. The compensation process is part of the DOJ's ongoing efforts to recover assets for victims of the scam, with US Attorney Jay Clayton stating that the department will continue to prioritize the recovery of criminal proceeds and the return of funds to those affected.
The move comes as part of a broader effort to hold accountable those responsible for the scam and to provide relief to victims.