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 was operated by OneCoin Ltd.
co-founders between 2014 and 2019, defrauded up to 3.4 million investors worldwide, with total losses exceeding $4 billion. The scheme involved the sale of a fraudulent cryptocurrency through a global multi-level marketing network, with promoters soliciting investments in exchange for purported tokens that did not actually exist on any blockchain. The DOJ has described the scheme as 'one of the largest global fraud schemes in history', which collapsed in 2017 after the founders were found to have manipulated 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, while another co-founder has admitted to federal wire fraud and money laundering charges.
According to US Attorney Jay Clayton, 'OneCoin's founders sold a lie disguised as cryptocurrency, causing losses of over $4 billion worldwide', and the DOJ will continue to work towards seizing criminal proceeds and returning funds to victims. This compensation process comes as part of a broader effort to recover assets for victims of cryptocurrency-related fraud, with other recent examples including the distribution of $2.2 billion to creditors of the FTX exchange.