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$4B OneCoin Scam Co-Founder Pleads Guilty, Faces 60 Years in Jail

The co-founder of the fraudulent scheme is scheduled to be sentenced in April 2023 on wire fraud and money laundering charges.

Karl Sebastian Greenwood, the co-founder of the multi-billion dollar fraudulent cryptocurrency scheme OneCoin, has pleaded guilty to multiple charges brought forward by the US Department of Justice (DOJ) and faces up to 60 years in prison.

Greenwood pleaded guilty in a Manhattan federal court on December 16 to charges of wire fraud, wire fraud conspiracy, and money laundering conspiracy, each carrying a maximum potential sentence of 20 years in prison.

According to US Attorney Damian Williams, Greenwood ran “one of the largest international fraud schemes ever perpetrated,” and he marketed OneCoin as a “Bitcoin killer” when the tokens were “entirely worthless.”

Greenwood co-founded OneCoin, a Bulgarian company that marketed a cryptocurrency by the same name, with “Cryptoqueen” Ruja Ignatova. According to emails obtained by the DOJ between the two prior to its establishment in 2014, the pair referred to it as a “trashy coin.”

On the surface, it appeared to be a multi-level marketing company, with members earning commissions for selling cryptocurrency packages containing OneCoin and the ability to mine more. Only on the private Xcoinx exchange could OneCoin be exchanged for fiat currency.

In reality, it was a pyramid and a Ponzi scheme because investors could recruit others into the scheme without a product and later investors were paid with money from earlier investors.

Greenwood was earning around $21.2 million (€20 million) per month as the fraudulent crypto firm’s “global master distributor,” according to the DOJ. OneCoin is thought to have defrauded over $4 billion from the three million people who purchased the packages.

In June, the Federal Bureau of Investigation placed Ignatova on its top ten most wanted list for her role in the scheme. She is still at large and was last seen in Athens, Greece, in October 2017.

Greenwood’s plea “sends a clear message” that the DOJ is “coming after all those who seek to exploit the cryptocurrency ecosystem through fraud, no matter how big or sophisticated you are,” according to Williams.

Greenwood is scheduled to be sentenced on April 5, 2023, before District Judge Edgardo Ramos.

Authorities in other countries have charged those associated with OneCoin and Ignatova, with three associates facing fraud and money laundering charges in Germany.

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