17 Dec 2022
OneCoin co-founder admits to crypto Ponzi scheme
The co-founder of OneCoin and an associate of the Cryptoqueen has pleaded guilty to operating a Ponzi scheme. Millions of people were duped into purchasing a deceptive virtual currency, resulting in billions of dollars in losses.
On December 16, U.S. Attorney Damian Williams confirmed that Karl Sebastian Greenwood pleaded guilty to circuit money laundering and fraud charges in Manhattan federal court.
"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."
U.S. Attorney Damian Williams also said:
“As a founder and leader of OneCoin, Karl Sebastian Greenwood operated one of the largest international fraud schemes ever perpetrated. Greenwood and his co-conspirators, including fugitive Ruja Ignatova, conned unsuspecting victims out of billions of dollars, claiming that OneCoin would be the ‘Bitcoin killer.’ In fact, OneCoins were entirely worthless. Greenwood’s lies were designed with one goal, to get everyday people all over the world to part with their hard-earned money — real money — and to line his own pockets to the tune of hundreds of millions of dollars. 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.”
OneCoin, based in Bulgaria, was established in 2014. Sebastian and Ruja Ignatova, aka the Cryptoqueen, co-founded OneCoin. The organization ran an MLM network in which members earned commissions for recruiting people to buy their products. The OneCoin participant network grew rapidly. Over 3 million people purchased phony digital asset packs. According to OneCoin documentation, between 2014 and 2016, the company made €4.037 billion in sales revenue and €2.735 billion in profits.
Before her disappearance in October 2017, Ignatova served as OneCoin's chief executive. Greenwood was the head of the MLM network that promoted the phony cryptocurrency OneCoin and served as its global master distributor. Ignatova credited the idea of promoting and selling OneCoin through an MLM network structure to Greenwood in a video posted online. At this job, Greenwood reportedly earned about €20 million each month.
Ignatova and Greenwood corresponded via email on August 9, 2014, during which Ignatova shared her thoughts on OneCoin's “exit strategy”:
"Take the money and run and blame someone else for this."
To add insult to injury, on September 11, 2016, Greenwood called OneCoin investors,
“idiots,” to which Konstantin Ignatova replied, “as you told me, the network would not work with intelligent people.”
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