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, was led by Ignatova and Karl Sebastian Greenwood, and involved a global network of promoters who solicited investments for a fraudulent cryptocurrency. The operation, which did not actually involve any cryptocurrencies or blockchain, defrauded up to 3.4 million investors worldwide, with total investments exceeding $4 billion. The scheme collapsed in 2017 after Ignatova and her team were found to have artificially inflated the perceived value of OneCoin.
In a statement, US Attorney Jay Clayton described OneCoin's founders as having 'sold a lie disguised as cryptocurrency', resulting in losses of over $4 billion worldwide. The DOJ will continue to work towards seizing further criminal proceeds, with the primary goal of returning funds to the victims.
This development comes as the FTX Recovery Trust has announced plans to distribute $2.2 billion to creditors, as part of its efforts to recover assets for users of the collapsed crypto trading platform.