Co-Founder of $4B+ OneCoin Pyramid Scheme Pleads Guilty

This Friday, the United States Attorney for the Southern District of New York Damian Williams announced that Karl Sebastian Greenwood, the co-founder of OneCoin, plead guilty. His main accomplice, “the Cryptoqueen” Ruja Ignatova, remains at large.

Karl Sebastian Greenwood Pleads Guilty to Wire Fraud and Money Laundering

On December 16th, 2022, Karl Sebastian Greenwood pled guilty to the charges of wire fraud and money laundering. Greenwood is a co-founder of the cryptocurrency pyramid scheme OneCoin which is believed to have defrauded investors worldwide of at least $4 billion since its founding in 2014. Damian Williams, the United States Attorney for the Southern District of New York, said that the operation was one of the largest international frauds ever committed:

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.

The sentence will be determined by District Judge Edgardo Ramos on April 5th, 2023, and all charges against Greenwood carry a maximum sentence of 20 years in prison. The other OneCoin founder, Ruja Ignatova, commonly referred to as “the Cryptoqueen”, disappeared in 2017 and is still at large. She is currently on the FBI’s most-wanted list. 

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Crypto Fraud Throughout 2022

While the annual report of the Financial Stability Oversight Council published on December 16th, indicates that fraud within the digital assets sector has been widespread for a long time—out of 8,300 crypto complaints received by the CFPB’s Consumer Complaint Database between October 2018 and September 2022, 40% appeared to be a “fraud or scam”—there has been a notable increase throughout this year.

Perhaps the most notable alleged case comes in the form of the recently-collapsed crypto exchange FTX. While many started suspecting something was wrong when the company stopped processing withdrawals on November 8th, the first real indication of foul play came after it was revealed that Sam Bankman-Fried’s exchange went against its own terms of service and lent billions of users’ funds to its sister company Alameda Research.

The facts uncovered after FTX’s bankruptcy led to the arrest of Sam Bankman-Fried, the company’s former CEO, by the Bahaman police. Not long after, it was revealed that the SEC charged the former billionaire with defrauding investors, the CFTC with fraudulent misstatements and a count of fraud and that the DoJ brought forth no fewer than eight separate charges against him.

Do you think Ruja Ignatova will ever be brought to justice? Let us know in the comments below.