A $40 million fund has been established from seized assets for victims of the $4 billion OneCoin scam, as announced by the US Department of Justice. The international cryptocurrency investment scheme, which operated from 2014 to 2019, was led by co-founders Ignatova and Karl Sebastian Greenwood, deceiving up to 3.4 million investors globally.
The operation, based in Sofia, Bulgaria, sold a fake cryptocurrency through a multi-level marketing network. Investors worldwide lost over $4 billion in the scheme, which did not involve actual cryptocurrencies or blockchain. The scheme collapsed in 2017 after the founders were found to have artificially inflated OneCoin's value.
In 2022, Greenwood admitted to federal wire fraud and money laundering charges. The US Attorney for the Southern District of New York stated that OneCoin's founders 'sold a lie disguised as cryptocurrency,' resulting in losses exceeding $4 billion worldwide.
The DOJ will continue to seize criminal proceeds, prioritizing the return of funds to victims. This development comes after the FTX Recovery Trust announced a $2.2 billion distribution to creditors, part of a larger effort to recover assets for users of the collapsed crypto trading platform.