A $40 million fund has been established from seized assets to provide compensation to victims of the $4 billion OneCoin cryptocurrency fraud, as announced by the US Department of Justice. The scam, which operated from 2014 to 2019, involved co-founders Ignatova and Karl Sebastian Greenwood deceiving up to 3.4 million investors globally. OneCoin, based in Sofia, Bulgaria, used a multi-level marketing network to sell a fake cryptocurrency, with worldwide investments totaling over $4 billion.
Notably, the scheme did not involve actual cryptocurrencies or blockchain technology. The operation collapsed in 2017 after Ignatova and her team were found to have artificially inflated the perceived value of OneCoin through automated coin generation.
In 2022, Greenwood admitted to federal wire fraud and money laundering charges, and a $5 million reward was offered for the missing 'Cryptqueen' in June 2024. According to US Attorney Jay Clayton, the DOJ will continue to prioritize seizing criminal proceeds and returning funds to victims. This development follows the FTX Recovery Trust's announcement to distribute $2.2 billion to creditors, as part of a broader effort to recover assets for users of the collapsed crypto trading platform.