A $40 million compensation fund, comprising seized assets, has been established for victims of the $4 billion OneCoin cryptocurrency fraud, as announced by the US Department of Justice. The scheme, which operated from 2014 to 2019, was led by Ignatova and Karl Sebastian Greenwood, co-founders of OneCoin Ltd, and involved the marketing and sale of a fraudulent cryptocurrency through a global multi-level marketing network. With up to 3.4 million investors defrauded worldwide, the operation amassed over $4 billion in investments, despite not being a legitimate cryptocurrency and lacking a presence on any blockchain. The scheme collapsed in 2017 after Ignatova and her team were found to have artificially inflated the value of OneCoin.
The Department of Justice has described the scheme as "one of the largest global fraud schemes in history". In recent developments, a $5 million reward has been offered for information leading to the capture of the missing 'Cryptqueen', while Greenwood has admitted to federal wire fraud and money laundering charges. According to US Attorney Jay Clayton, the founders of OneCoin "sold a lie disguised as cryptocurrency", resulting in losses exceeding $4 billion worldwide.
The compensation process is part of ongoing efforts to seize criminal proceeds and return funds to victims. This development follows the announcement by the FTX Recovery Trust to distribute $2.2 billion to creditors, as part of a broader effort to recover assets for users of the collapsed crypto trading platform.