$4 Billion Crypto Scam: OneCoin Co-Founder Gets 20 Years in Prison

<p>Karl
Sebastian Greenwood, one of the Co-Founders of OneCoin, a fraudulent
cryptocurrency scheme, has been sentenced to 20 years in prison for his role in
orchestrating this massive fraud. He has been ordered to pay approximately $300
million in forfeiture.</p><p>Greenwood's
Role as Co-Founder of OneCoin</p><p>OneCoin
was established in 2014 based in Sofia, Bulgaria. It operated as a
cryptocurrency but was, in reality, a fraudulent scheme. The scheme was
marketed and sold globally through a multi-level marketing (MLM) network. The participants
recruited others to purchase OneCoin cryptocurrency packages.</p><p>Greenwood
played a central role in OneCoin's MLM network as its global master distributor
and leader. He earned substantial commission by recruiting new participants
and was instrumental in promoting and selling the fraudulent cryptocurrency. Between
the fourth quarter of 2014 and the fourth quarter of 2016, OneCoin amassed over
$4 billion from more than 3.5 million victims. The victims invested in OneCoin
cryptocurrency packages, believing they were making a legitimate investment.</p><p>Deceptive
Practices: How OneCoin Misled Investors</p><p>Greenwood
and other key figures in OneCoin deceived investors by comparing OneCoin to
legitimate <a href="https://www.financemagnates.com/terms/c/cryptocurrencies/">cryptocurrencies</a> like <a href="https://www.financemagnates.com/tag/bitcoin/">Bitcoin</a>. They claimed
that OneCoin's value was determined by market supply and demand. In reality, the
price was arbitrarily set by OneCoin without regard to market forces. <a href="https://www.financemagnates.com/tag/onecoin/">OneCoin</a> also lied about
the utility of its tokens and falsely claimed they could be used for mining OneCoins.</p><p>OneCoin
promoted a "private <a href="https://www.financemagnates.com/terms/b/blockchain/">blockchain</a>". However, it lacked a public and
verifiable blockchain. By March 2015, Greenwood and Ruja Ignatova a Co-Founder
of OneCoin as stated in the source is known as the "Cryptoqueen", began allocating "fake
coins" to members, referring to OneCoins that didn't even exist in
OneCoin's purported private <a href="https://www.financemagnates.com/tag/blockchain/">blockchain</a>.</p><p>Greenwood
earned over $300 million during the scheme, and he used these ill-gotten gains
to fund an extravagant lifestyle. He spent millions on luxury designer items, a
yacht, and real estate properties across different countries. He even travelled
the world on a private plane branded with "OneCoin."</p><p>Ignatova's
Disappearance and FBI's Most Wanted List</p><p>Greenwood
was arrested in Koh Samui, Thailand, in July 2018 and extradited to the United
States in October 2018. He has been detained since his arrest. Ignatova has
been on the run since October 2017. She was added to the FBI's top ten most
wanted list in June 2022.</p><p>A claim was made earlier that <a href="https://www.financemagnates.com/cryptocurrency/document-says-onecoin-founder-ruja-ignatova-killed-in-2018-in-greece/">Ignatova
was killed in 2018</a> in Greece. However, there is no proof of that. The BBC
has uncovered that secretly acquired a luxurious four-bedroom penthouse. It was
filled with expensive artwork and designer clothing. This revelation comes
after financial regulators in at least one European country had already issued
warnings about her fraudulent cryptocurrency scheme. </p><p>This
case highlights the severity of cryptocurrency-related fraud and its global
impact, as millions of investors fell victim to the OneCoin scam. While one
co-founder has been brought to justice, the other remains at large, and the FBI
is offering a substantial reward for information leading to her arrest.</p>

This article was written by Tareq Sikder at www.financemagnates.com.