A $40 million fund has been established from seized assets to provide compensation to victims of the $4 billion OneCoin scam, as announced by the US Department of Justice on Monday. The international cryptocurrency investment scheme, which operated from 2014 to 2019, was led by co-founders Ignatova and Karl Sebastian Greenwood, and deceived up to 3.4 million investors globally.
The scheme involved a global multi-level-marketing network that sold a fake cryptocurrency, with victims investing over $4 billion worldwide. The operation was found to be a Ponzi scheme, which collapsed in 2017 after the founders were discovered to have artificially inflated the value of OneCoin.
In recent developments, a $5 million reward has been offered for the capture of the missing 'Cryptqueen', while Greenwood has admitted to federal wire fraud and money laundering charges. According to US Attorney Jay Clayton, the founders 'sold a lie disguised as cryptocurrency', resulting in losses of over $4 billion worldwide. The DOJ has pledged to continue seizing criminal proceeds and prioritizing the return of funds to victims.
This compensation process comes on the heels of 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.