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 United States Department of Justice (DOJ) and faces a maximum of 60 years in prison.
The DOJ announced on Dec. 16 that Greenwood submitted a guilty plea in a Manhattan federal court to charges of wire fraud, wire fraud conspiracy and money laundering conspiracy with each charge carrying a maximum potential sentence of 20 years in jail.
U.S. Attorney Damian Williams said Greenwood operated “one of the largest international fraud schemes ever perpetrated” and claimed he touted OneCoin as a “Bitcoin killer” when in reality the tokens were “entirely worthless.”
OneCoin was a Bulgarian company founded by Greenwood alongside “Cryptoqueen” Ruja Ignatova that marketed a cryptocurrency by the same name. Emails obtained by the DOJ between the two before its founding in 2014 allege the pair called it a “trashy coin.”
Outwardly it claimed to be a multi-level marketing firm with members gaining commissions for selling cryptocurrency packages apparently containing OneCoin and the ability to mine more. OneCoin could only be exchanged for fiat currency on the private Xcoinx exchange.
In reality, it was both a pyramid and a Ponzi scheme as investors could recruit others into the scheme without an actual product and later investors were paid with the money from earlier investors.
According to the DOJ Greenwood was earning around $21.2 million (€20 million) per month in his role as the “global master distributor” of the fraudulent crypto firm. Over $4 billion is believed to have been swindled by OneCoin from the three million people who invested in the packages.
Ignatova was placed on the Federal Bureau of Investigation’s top ten most wanted list in June for her role in the scheme. She remains at large and was last known to have traveled to Athens, Greece in Oct. 2017.
Related: How to tell if a cryptocurrency project is a Ponzi scheme
Williams said Greenwood’s plea “sends a clear message” the DOJ is “coming after all those who seek to exploit the cryptocurrency ecosystem through fraud, no matter how big or sophisticated you are.”
Greenwood is slated to be sentenced before District Judge Edgardo Ramos on Apr. 5, 2023.
Authorities elsewhere have charged those involved with OneCoin and Ignatova, with three associates facing charges in Germany over fraud and money laundering.
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