A $40 million fund has been established from seized assets to provide compensation to victims of the $4 billion OneCoin cryptocurrency scam, as announced by the US Department of Justice. The scheme, which operated from 2014 to 2019, involved the co-founders of OneCoin Ltd., Ignatova and Karl Sebastian Greenwood, who defrauded up to 3.4 million investors worldwide through a global multi-level-marketing network. The operation, based in Sofia, Bulgaria, sold a fraudulent cryptocurrency through a network of promoters, with investors worldwide losing over $4 billion.
The scheme collapsed in 2017 after it was discovered that the 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, and in June 2024, a $5 million reward was offered for the missing Cryptqueen.
According to US Attorney Jay Clayton, the founders of OneCoin sold a false promise disguised as a cryptocurrency, resulting in losses of over $4 billion worldwide. The DOJ will continue to seize criminal proceeds and prioritize returning funds to the victims. This development comes approximately four weeks after the FTX Recovery Trust announced a $2.2 billion distribution to creditors as part of its Chapter 11 plan, with previous rounds totaling over $6 billion in an effort to recover assets for users of the crypto trading platform that collapsed in November 2022.