More than a decade after the OneCoin scam began, victims are now eligible for compensation from a $40 million fund of seized assets, as announced by the US Department of Justice. The international cryptocurrency investment scheme, which defrauded up to 3.4 million investors globally, was operated by OneCoin Ltd. co-founders between 2014 and 2019.
The scheme involved marketing and selling a fake cryptocurrency through a global multi-level-marketing network, with investors worldwide losing over $4 billion. The operation, deemed one of the largest global fraud schemes in history, collapsed in 2017 after the founders were found to have artificially inflated the perceived value of OneCoin. Following the collapse, the Department of Justice has been working to recover assets, with a recent $5 million reward offered for information on the missing founder.
The compensation process comes as part of the DOJ's ongoing efforts to seize criminal proceeds and return money to the victims, with US Attorney Jay Clayton stating that the founders 'sold a lie disguised as cryptocurrency, costing victims more than $4 billion worldwide'. The move follows a similar distribution of $2.2 billion to creditors of the FTX Recovery Trust, as part of a larger effort to recover assets for users of the collapsed crypto trading platform.