The US Department of Justice has established a $40 million compensation fund for victims of the OneCoin cryptocurrency scam, which defrauded approximately 3.4 million investors of over $4 billion between 2014 and 2019. The scheme, operated by co-founders Ignatova and Karl Sebastian Greenwood, involved a global multi-level marketing network that sold a fraudulent cryptocurrency. The operation, which did not involve actual cryptocurrencies or blockchain technology, collapsed in 2017 after its perceived value was manipulated by the generation of new coins. In 2022, Greenwood admitted to federal wire fraud and money laundering charges, while Ignatova remains at large, with a $5 million reward offered for her capture.
According to US Attorney Jay Clayton, the DOJ will continue to seize criminal proceeds and prioritize reimbursing victims. This development comes as the FTX Recovery Trust prepares to distribute $2.2 billion to creditors, part of a larger effort to recover assets for users of the collapsed crypto trading platform.