A $40 million fund has been established from seized assets for victims of the $4 billion OneCoin cryptocurrency fraud to seek compensation, as announced by the US Department of Justice. The 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 Bulgaria-based operation used a multi-level marketing network to sell fraudulent cryptocurrency, with investors worldwide losing over $4 billion.
The scheme collapsed in 2017 after it was discovered that the value of OneCoin was artificially inflated through automated coin generation. In 2022, Greenwood admitted to federal wire fraud and money laundering charges. The US Department of Justice has stated that it will continue to seize criminal proceeds, prioritizing the return of funds to the victims.
This development comes after the FTX Recovery Trust announced a $2.2 billion distribution to creditors, as part of its efforts to recover assets for users of the collapsed crypto trading platform.