More than a decade after the OneCoin scam began, victims of the $4 billion cryptocurrency fraud scheme can now apply for compensation from a $40 million fund of seized assets, as announced by the US Department of Justice. The scheme, which was operated by OneCoin Ltd.
co-founders between 2014 and 2019, defrauded up to 3.4 million investors worldwide through a global multi-level-marketing network. The operation, based in Sofia, Bulgaria, sold a fake cryptocurrency through a network of promoters who solicited investments in exchange for purported tokens, but did not involve any actual cryptocurrencies or blockchain. The scheme, described by the DOJ as 'one of the largest global fraud schemes in history', collapsed in 2017 after the founders were found to have manipulated the perceived value of OneCoin.
In 2022, one of the co-founders admitted to federal wire fraud and money laundering charges, while the other, known as the 'Cryptqueen', remains at large with a $5 million reward offered for her capture. The US Attorney for the Southern District of New York stated that the founders 'sold a lie disguised as cryptocurrency, costing victims over $4 billion worldwide' and emphasized the DOJ's commitment to seizing criminal proceeds and returning money to victims. This development comes shortly after the FTX Recovery Trust announced plans to distribute $2.2 billion to creditors, as part of a broader effort to recover assets for users of the collapsed crypto trading platform.