3 - 4 minute read
Karl Sebastian Greenwood, co-founder of the cryptocurrency company OneCoin, has pleaded guilty to fraud charges. In a press statement released on December 16, the authorities described Greenwood as the operator of one of the largest international fraud schemes in history.
OneCoin, a cryptocurrency that was created in 2014 by Greenwood and his co-founder, Ruja Ignatova, was marketed as a legitimate investment opportunity. However, it quickly became apparent that OneCoin had no real value and was being used to defraud investors. According to the U.S. attorney, Damian Williams, Greenwood and Ignatova “conceived of and built the OneCoin business fully intending to use it to defraud investors.”
While Greenwood has now admitted his guilt, Ignatova has been missing since 2017 and is believed to be on the run. According to Department of Justice (DOJ) records, Greenwood was earning around €20 million per month as the top MLM (multi-level marketing) distributor of OneCoin.
It is not yet clear what sentence Greenwood will receive for his crimes, but the individual charges carry a maximum sentence of 20 years in prison. The sentencing has been scheduled for April 5, 2023.
The OneCoin scam is just one example of the many fraudulent cryptocurrency schemes that have emerged in recent years. As the popularity of cryptocurrencies has grown, so too has the number of scams and fraudulent operations looking to take advantage of unsuspecting investors. It is important for individuals to do their due diligence before investing in any cryptocurrency, as many of these schemes can be difficult to spot and can result in significant financial losses.
OneCoin was particularly effective at targeting inexperienced investors, using aggressive marketing tactics and promising unrealistic returns on investment. Despite being marketed as a legitimate cryptocurrency, OneCoin had no underlying technology or value. Instead, it was essentially a Ponzi scheme, using money from new investors to pay off earlier investors.
The OneCoin scam was able to operate for several years and defraud thousands of investors before it was finally shut down. According to the DOJ, the scam is estimated to have defrauded investors of billions of dollars.
In addition to Greenwood’s guilty plea, several other individuals associated with the OneCoin scam have been arrested and charged with fraud. These include Konstantin Ignatov, Ruja Ignatova’s brother, who pleaded guilty to money laundering and conspiracy charges in 2019.
The OneCoin scam serves as a cautionary tale for investors looking to enter the cryptocurrency market. It is important to thoroughly research any potential investment opportunities and be wary of any promises of unrealistic returns. While cryptocurrencies can be a legitimate investment opportunity, it is crucial to be aware of the potential risks and to invest wisely.