Karl Sebastian Greenwood, a co-founder of OneCoin, has pleaded guilty to several charges brought by the U.S. Department of Justice (DOJ) and could face up to 60 years in prison.
OneCoin was a fraudulent cryptocurrency scheme conducted by offshore companies based in Bulgaria and registered in Dubai that duped unsuspecting victims out of billions of dollars.
According to the DOJ, Greenwood entered a guilty plea to counts of wire fraud, conspiracy to commit wire fraud, and conspiracy to launder money, each carrying a maximum sentence of 20 years in prison.
U.S. Attorney for the Southern District of New York, Damian Williams, stated in a report: “
“KARL SEBASTIAN GREENWOOD, who co-founded OneCoin with RUJA IGNATOVA, a/k/a the Cryptoqueen, pled guilty today in Manhattan federal court to wire fraud and money laundering charges in connection with his participation in the massive OneCoin fraud scheme.”
According to U.S. Attorney Damian Williams, Karl Sebastian Greenwood, the founder and executive director of OneCoin, was responsible for running one of the largest global fraud schemes in history.
Along with wanted accomplice Ruja Ignatova, Greenwood allegedly deceived victims into investing billions of dollars into OneCoin, claiming it was the “Bitcoin killer,” but in reality, the virtual currency had no value.
Damian Williams also stated:
“This guilty plea by the co-founder of OneCoin caps a week at SDNY that sends a clear message that we are coming after all those who seek to exploit the cryptocurrency ecosystem through fraud, no matter how big or sophisticated you are.”
Greenwood and the Cryptoqueen; Ruja Ignatova founded OneCoin, a firm that promoted a cryptocurrency by the same name, which actually turned out to be a pyramid scheme. Before the company was founded in 2014, emails between the two allegedly contained references to it as a “trash coin.”
OneCoin operated as an MLM network, with members earning commissions for bringing in new customers who purchased cryptocurrency packages. This MLM structure fueled the rapid growth of the OneCoin member network.
According to OneCoin’s marketing materials, nearly three million consumers purchased phony bitcoin packages.
The email sent between Ignatova and Greenwood on June 11, 2014, was made public by the Department of Justice as related to the OneCoin business plan.
The email stated:
“It might not be [something] really clean or that I normally work on or even can be proud of (except with you in private when we make the money) – but . . . I am especially good in this very borderline cases [sic], where the things become gray – and you as the magic sales machine – and me as someone who really can work with numbers, legal and back you up in a good and professional way – we could really make it big – like MLM meets bitch of wall street ;-).”
In a separate email exchange with Greenwood, Ignatova discussed her ideas regarding OneCoin’s exit plan. According to the Department of Justice, Ignatova’s initial option was to “take the money and run and blame someone else for this.”
Furthermore, in a conversation with Konstantin Ignatov on September 11, 2016, GREENWOOD referred to OneCoin investors as “idiots,” to which Ignatov responded, “as you said, the network would not work with intelligent people ;).”
Because the defendant’s sentence will be determined by a judge, Congress established the maximum possible penalties. Judge Ramos will sentence the defendant on April 5, 2023.
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