Those who have been in the crypto space for quite a while can still remember the elaborate OneCoin scam. A bit of justice seems to have been served on Tuesday as one of the fraudulent project’s co-founders was sentenced to 20 years in prison.
According to reports, Karl Greenwood, co-founder of OneCoin was sentenced in the United States to 20 years in prison and ordered to pay $300 million on September 20.
Karl Greenwood sentenced to jail
On Tuesday, Karl Greenwood, who is a citizen of the United Kingdom and Sweden, was sentenced in the United States District Court for the Southern District of New York. In a statement by the Justice Department, US Attorney, Damian Williams referred to OneCoin as “one of the largest fraud schemes ever perpetrated.”
The judge sentenced Greenwood to 20 years in prison for masterminding the massive cryptocurrency scam which defrauded millions of investors out of over $4 billion worldwide. Recall that Greenwood has been in custody since 2018 when he was extradited from Thailand.
He pleaded guilty to charges of fraud and money laundering in December and could have received a sentence of up to 60 years, per reports.
Greenwood is said to have made over $300 million through a 5% commission on all OneCoin sales. He reportedly lived a life of luxury on his ill-gotten wealth and splurged on designer clothes, expensive watches, properties abroad, and a luxury yacht.
In March, OneCoin’s former head of legal and compliance, Irina Dilkinska was reportedly charged in the United States with one count of wire fraud and one count of conspiracy to commit money laundering. Also in August 2022, one of the scheme’s associates, Christopher Hamilton was set to be extradited to the United States on fraud and money laundering charges, according to a report.
The OneCoin scam
OneCoin, the multilevel marketing and Ponzi scheme generated €4.037 billion in sales revenue between the fourth quarter of 2014 and the fourth quarter of 2016, earning €2.735 billion in profits. Although the project was marketed globally, most of its victims were Americans.
In reality, unlike legitimate cryptocurrencies, OneCoin had no actual value. The OneCoin team compared its product to Bitcoin in sales pitches but did not have a true blockchain. OneCoin mined no coins, had no blockchain, and arbitrarily invented fake valuations that only rose over time. Yet they were able to convince believers they were getting in early on the next Bitcoin.
Victims were fooled by hype comparing OneCoin to Bitcoin and claimed it could overtake the pioneering cryptocurrency while in reality, it had no trading, mining, or verification processes.
Ruja Ignatova, the scheme’s cofounder, Karl Greenwood and other members of their cohorts marketed OneCoin as a legitimate Bitcoin alternative while the project was worthless from the start.
Ruja Ignatova, known as “Cryptoqueen” disappeared in 2017 after the United States indicted her on fraud and money laundering charges. She was the public face of OneCoin, selling the scam globally through flashy marketing events and pumping up hype. The FBI now lists her among their most wanted with a $100,000 reward for information leading to her arrest.
Earlier this year, rumours circulated that the fugitive was killed in Greece five years ago.
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