A $40 million compensation fund has been established 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 fraudulent cryptocurrency through a global multi-level marketing network.
Approximately 3.4 million investors worldwide were defrauded, with total losses exceeding $4 billion. The scheme was eventually exposed as a Ponzi scheme in 2017, after it was discovered that the value of OneCoin was being artificially inflated through the automatic generation of new coins. In recent developments, the DOJ has offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen', while Greenwood has admitted to federal wire fraud and money laundering charges. According to US Attorney Jay Clayton, 'OneCoin's founders perpetrated a massive fraud, deceiving victims out of more than $4 billion worldwide.' The DOJ will continue to work towards seizing criminal proceeds and prioritizing the return of funds to victims.
This announcement comes on the heels of the FTX Recovery Trust's decision to distribute $2.2 billion to creditors, as part of a broader effort to recover assets for users of the collapsed crypto trading platform.