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 international scheme, operated by OneCoin Ltd. co-founders between 2014 and 2019, defrauded approximately 3.4 million investors worldwide.
The fraudulent cryptocurrency was marketed and sold through a global multi-level marketing network, with promoters soliciting investments in exchange for supposed tokens. However, the scheme did not involve actual cryptocurrencies and was not based on any blockchain.
The operation collapsed in 2017 after the founders were found to have artificially inflated the perceived value of OneCoin. In recent developments, the DOJ has offered a $5 million reward for information leading to the capture of a key figure in the scheme.
The US Attorney for the Southern District of New York stated that the founders 'sold a lie disguised as cryptocurrency,' resulting in losses of over $4 billion worldwide. The DOJ will continue to work towards seizing criminal proceeds and prioritizing the return of funds to victims. This compensation process follows a similar distribution of $2.2 billion to creditors of the FTX exchange, which collapsed in November 2022.