A $40 million fund has been established from seized assets to provide compensation to victims of the $4 billion OneCoin cryptocurrency fraud, the US Department of Justice announced. The scheme, which operated from 2014 to 2019, defrauded up to 3.4 million investors worldwide. Co-founders Ignatova and Karl Sebastian Greenwood, along with others, ran the international cryptocurrency investment scam through a global multi-level-marketing network. The operation, based in Sofia, Bulgaria, sold a fraudulent cryptocurrency, marketing it as a legitimate investment opportunity.
However, the cryptocurrency did not exist on any blockchain and did not involve actual cryptocurrencies. The scheme collapsed in 2017 after it was discovered that Ignatova and her team had artificially inflated the value of OneCoin.
In 2022, Greenwood admitted to federal wire fraud and money laundering charges, and in June 2024, the DOJ offered a $5 million reward for information leading to the capture of the missing 'Cryptqueen'. According to US Attorney Jay Clayton, the founders of OneCoin 'sold a lie disguised as cryptocurrency', resulting in losses of over $4 billion worldwide. The DOJ will continue to pursue criminal proceeds and prioritize returning funds to the victims. This development comes as the FTX Recovery Trust is set to distribute $2.2 billion to creditors, part of a larger effort to recover assets for users of the crypto trading platform, which collapsed in November 2022.