A $40 million fund has been established from seized assets for victims of the $4 billion OneCoin scam to seek compensation, as announced by the US Department of Justice. The international cryptocurrency investment scheme, which ran from 2014 to 2019, was operated by OneCoin Ltd. co-founders and defrauded up to 3.4 million investors globally. The scheme involved marketing and selling a fake cryptocurrency through a multi-level marketing network.
Over $4 billion was invested worldwide in the fraudulent cryptocurrency, which did not involve actual cryptocurrencies and was not on any blockchain. The scheme collapsed in 2017 after it was discovered that the founders manipulated the perceived value of OneCoin. In 2022, one of the co-founders admitted to federal wire fraud and money laundering charges. The US Attorney for the Southern District of New York stated that the founders sold a false cryptocurrency, resulting in losses of over $4 billion worldwide, and that the DOJ will continue to seize proceeds and prioritize returning funds to victims.
This development comes after the FTX Recovery Trust announced a $2.2 billion distribution to creditors, part of a larger effort to recover assets for users of the collapsed crypto trading platform.