A $40 million compensation fund has been established for victims of the $4 billion OneCoin cryptocurrency scam, as announced by the US Department of Justice. The scheme, which operated from 2014 to 2019, involved co-founders Ignatova and Karl Sebastian Greenwood deceiving up to 3.4 million investors worldwide through a global multi-level marketing network.
The fraudulent cryptocurrency, which was not backed by any actual cryptocurrency or blockchain, was sold to investors who lost over $4 billion. The scheme collapsed in 2017 after it was discovered that the value of OneCoin was artificially inflated. In recent developments, the DOJ has been working to seize assets and return them to the victims, with US Attorney Jay Clayton stating that the founders 'sold a lie disguised as cryptocurrency'.
The compensation process comes as part of broader efforts to recover assets for victims of the scam, with the DOJ committed to continuing its work to reclaim proceeds and prioritize restitution for those affected.