More than a decade after the inception of the OneCoin scam, victims of the $4 billion cryptocurrency fraud scheme are now eligible to receive compensation from a $40 million fund comprised of seized assets, as announced by the US Department of Justice on Monday. The scheme, which was operated by OneCoin Ltd. co-founders between 2014 and 2019, defrauded up to 3.4 million investors globally.
The operation, based in Sofia, Bulgaria, sold a fraudulent cryptocurrency through a worldwide multi-level-marketing network. Investors from around the globe lost over $4 billion to the scheme, which did not actually involve any cryptocurrencies and was not listed on any blockchain.
The DOJ has described the scheme as "one of the largest global fraud schemes in history". After the scheme collapsed in 2017 due to the manipulation of its perceived value, the DOJ has been working to seize assets and bring those responsible to justice. In a recent development, 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 of OneCoin "sold a lie disguised as cryptocurrency", resulting in losses of over $4 billion for victims worldwide.
The DOJ will continue to prioritize the recovery of assets and the distribution of compensation to victims. This development comes as another major cryptocurrency recovery effort is underway, with the FTX Recovery Trust announcing plans to distribute $2.2 billion to creditors.