The US Department of Justice has established a $40 million compensation fund for victims of the OneCoin cryptocurrency scam, which is believed to have defrauded up to 3.4 million investors worldwide out of approximately $4 billion between 2014 and 2019. Co-founders Ignatova and Karl Sebastian Greenwood, along with other individuals, orchestrated the international scheme through a multi-level marketing network, selling a fraudulent cryptocurrency that did not actually exist on any blockchain.
The scheme, described by the DOJ as one of the largest global frauds in history, collapsed in 2017 after it was discovered that Ignatova and her team had artificially inflated the value of OneCoin by generating new coins. In June 2024, the DOJ announced a $5 million reward for information leading to the capture of Ignatova, who remains at large. Greenwood pleaded guilty to federal wire fraud and money laundering charges in 2022.
According to US Attorney Jay Clayton for the Southern District of New York, the founders of OneCoin 'sold a lie disguised as a cryptocurrency', resulting in losses of over $4 billion worldwide. The DOJ has stated that it will continue to seize assets and prioritize returning funds to the victims.
This development comes shortly after the FTX Recovery Trust announced plans to distribute $2.2 billion to creditors, as part of a broader effort to recover assets for users of the crypto trading platform, which collapsed in November 2022.