More than a decade after the inception of the OneCoin scam, victims of the $4 billion cryptocurrency fraud scheme are now eligible 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, duped up to 3.4 million investors worldwide. The operation, based in Sofia, Bulgaria, used a global multi-level-marketing network to sell a fake cryptocurrency. Investors from around the globe lost over $4 billion to the scheme, which did not involve any actual cryptocurrency or blockchain. The DOJ has described the scheme as 'one of the largest global fraud schemes in history.' After its collapse in 2017, the DOJ has been working to seize assets and bring the perpetrators to justice.
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 lie disguised as cryptocurrency,' resulting in losses of over $4 billion worldwide. The DOJ will continue to prioritize the recovery of assets for victims. This development comes shortly after the FTX Recovery Trust announced its plans to distribute $2.2 billion to creditors, as part of its efforts to recover assets for users of the collapsed crypto trading platform.