A $40 million fund has been established from seized assets for victims of the OneCoin cryptocurrency scam to claim compensation, as announced by the US Department of Justice. The scam, which ran from 2014 to 2019, involved co-founders Ignatova and Karl Sebastian Greenwood deceiving up to 3.4 million investors worldwide through a global multi-level marketing network.
The scheme, deemed one of the largest global frauds in history, saw investors lose over $4 billion. The operation was based in Sofia, Bulgaria, and involved the sale of a fake cryptocurrency through a network of promoters.
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.
The US Attorney for the Southern District of New York stated that the founders of OneCoin sold a false cryptocurrency, resulting in losses of over $4 billion worldwide. The Department of Justice will continue to seize assets and prioritize returning funds to victims. This development comes after the FTX Recovery Trust announced a $2.2 billion distribution to creditors, as part of a larger effort to recover assets for users of the collapsed crypto trading platform.