Karl Sebastian Greenwood, the co-founder of multi-billion-dollar fraudulent cryptocurrency scheme OneCoin, has pleaded guilty to multiple U.S. Department of Justice (DOJ) and could face a maximum of 60-year imprisonment.
On Dec. 16, the DOJ announced that Greenwood had entered a guilty plea before a Manhattan federal judge to wire fraud conspiracy, money laundering conspiracy, and wire fraud conspiracy. Each charge carries a maximum sentence of 20 years imprisonment.
U.S. Attorney Damian Williams claimed that Greenwood ran “one of the most extensive international fraud schemes ever perpetrated.” He also claimed OneCoin was a “Bitcoin Killer” while the tokens were “entirely valueless.”
OneCoin was a Bulgarian firm founded by Greenwood and “Cryptoqueen” Ruja Ignatova. It marketed a cryptocurrency with the same name. Emails between the DOJ and the founders of OneCoin in 2014 reveal that they called it a “trashy currency.”
It claimed to be a multi-level marketing company with members earning commissions for selling crypto packages containing OneCoin. OneCoin could not be exchanged on the private Xcoinx Exchange for fiat currency.
It was a Ponzi scheme and a pyramid, as investors could recruit others to the scheme without a product. Later, investors were paid with money from previous investors.
According to the DOJ, Greenwood earned around $21.2 million per month (EUR20 million) as a “global master distributor” for the fraudulent crypto company. OneCoin is believed to have defrauded more than $4 billion from the three million investors in the packages.
In June, Ignatova was listed on the Federal Bureau of Investigation’s top 10 most wanted list for her involvement in the scheme. She is still at large, and it was unknown if she traveled to Athens in October 2017.
Williams stated that Greenwood’s plea sends “a clear message” that the DOJ will pursue all fraudsters who attempt to exploit the cryptocurrency ecosystem by stealing it.
District Judge Edgardo RAMOS will sentence Greenwood in April. 5, 2023. Authorities have already charged Ignatova and OneCoin with money laundering, while three of their associates are facing criminal charges in Germany.