OneCoin Co-Founder Pleads Guilty To Fraud

Karl Sebastian Greenwood, co-founder of the “Bitcoin-killer” scam OneCoin, offered a different take on the alleged cryptocurrency on Friday when he pleaded guilty in Manhattan federal court to charges of conspiring to defraud investors and money laundering.

Greenwood was arrested in Thailand in July 2018 and later extradited to the US. OneCoin’s other co-founder, “Cryptoqueen” Ruja Ignatova (Dr. Ruja Ignatova – has a law degree), remains a fugitive on the FBI’s Ten Most Wanted List and Europol’s Most Wanted List.

“As the founder and leader of OneCoin, Karl Sebastian Greenwood operated one of the largest international fraud schemes ever perpetrated,” US Attorney Damian Williams said in a statement. “Greenwood and his co-conspirators, including fugitive Ruja Ignatova, swindled unsuspecting victims out of billions of dollars, claiming OneCoin would be the ‘Bitcoin killer’. In fact, OneCoins were worthless at all.”

The United States has indicted at least nine people in four related cases, including Greenwood and Ignatova, on fraud charges related to OneCoin. Authorities in China have prosecuted 98 people accused of trying to sell OneCoin. Indian police arrested 18 people for running Ponzi scheme.

According to the Department of Justice, Greenwood and Ignatova founded OneCoin in Sofia, Bulgaria in 2014. Until about 2017, they are said to have marketed OneCoin as a cryptocurrency to investors. The OneCoin exchange was shut down in January 2017, but apparently operations continued between affiliates for some time. The website remained online until 2019.

In fact, OneCoin was a multi-level marketing (MLM) pyramid scheme in which members of the network received commissions when they managed to recruit people to buy OneCoin. The firm’s own promotional materials claim more than three million people invested. And between the fourth quarter of 2014 and the fourth quarter of 2016, company records state that OneCoin generated more than $4.3 billion in revenue and $2.9 billion in alleged profits.

At the top of the MLM pyramid, Greenwood is said to have earned $21 million a month. Greenwood and others claimed that OneCoin was mined with computing power like BitCoin and recorded on a blockchain. But it wasn’t.

As Ignatova allegedly said in an email to Greenwood, “We’re not actually mining, we’re telling people shit.”

OneCoin’s value, according to the feds, was simply set by those running the company: They rigged the OneCoin exchange to simulate trading volatility, but OneCoin’s price always closed higher than it opened.

In an email dated August 1, 2015, Ignatova allegedly told Greenwood that one of the goals of the trading exchange OneCoin was to “always close an open house at the end of the day with a high price, build confidence , better handling so they’re happy.”

According to the Department of Justice, the value assigned to OneCoin grew steadily from €0.50 ($0.53) to approximately €29.95 ($31.80) per coin and never decreased.

Greenwood, a 45-year-old citizen of Sweden and the United Kingdom, pleaded guilty to one count of conspiracy to commit wire fraud, wire fraud and conspiracy to commit money laundering. Each carries a maximum sentence of 20 years in prison.

Greenwood described Ignatova as “the creator, the mastermind, the founder of cryptocurrency” at an event called “Coin Rush” held at London’s Wembley Arena on June 11, 2016.

Email correspondence between Greenwood and Ignatova, as cited by the Justice Department, describes how the defendants referred to OneCoin privately as “junk currency.” And in an Aug. 9, 2014, email exchange with Greenwood, Ignatova’s first choice on a list of possible exit strategies is said to have been, “Take the money and run and blame it on somebody else …”.

Records show that Ignatova traveled from Sofia, Bulgaria to Athens, Greece on October 25, 2017 and her whereabouts are currently unknown. For information leading to his arrest, the United States Federal Bureau of Investigation is offering a reward of $100,000, in fiat currency. ®

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