The co-founder of the infamous cryptocurrency pyramid scheme, OneCoin, which amassed over $4 billion from investors worldwide, was sentenced to 20 years in prison on Monday for wire fraud and money laundering charges.
Karl Greenwood, who orchestrated the multilevel marketing con along with self-proclaimed “Cryptoqueen” Ruta Ignatova, pleaded guilty to his role in the multi-billion dollar scheme in December 2022.
Meanwhile, his partner, who is on the FBI’s Top 10 Most Wanted List, remains at large after fleeing the United States six years ago.
Partner Of “Cryptoqueen” Ruta Ignatova Gets Sentenced To 20 Years In Prison
In a press release on Tuesday, U.S. Attorney for the Department of Justice (DoJ), Damian Willaims said that 46-year-old Greenwood “operated one of the largest fraud schemes ever perpetuated” in U.S. history and hopes the lengthy sentence may deter “anyone who may be tempted to lie to investors and exploit the cryptocurrency ecosystem through fraud”.
OnceCoin, which began its life in Bulgaria in 2014, was portrayed by both Greenwood and Ruja Ignatova as the next big investment opportunity in crypto and a worthy rival to the mighty Bitcoin.
In a flashy London investor event hosted before its collapse, Ignatova claimed OneCoin would become such a huge hit that nobody would be speaking about Bitcoin in two years’ time.
Investors should have sensed the danger with that single statement.
OneCoin Investors Were Defrauded For Over $3 Billion
More than 3 million people invested in OneCoin between 2014 and 2016. The pyramid scheme was marketed and sold using a multilevel marketing structure that paid commissions to community members who recruited others to buy the company’s crypto packages.
According to the DoJ, Greenwood, who was the company’s top distributor, received 5% of all OneCoin package sales, which led to him raking in more than $300 million from the whole ordeal.
However, unlike other legitimate cryptocurrencies, OneCoin had no actual value and was conceived as a fraud scheme by Greenwood and Ignatova “from day one”, read the statement.
The justice department added that the co-founders and other partners repeatedly lied to investors by claiming that OneCoin’s value was determined by the market, but in reality, the token’s price was set “arbitrarily”.
Attorney Williams stated that Greenwood, a citizen of Sweden and the United Kingdom, was a master salesman who helped make OneCoin a huge success.
Greenwood And Ignatova Branded Investors As “Idiots” For Buying The Lie
Court documents presented by federal prosecutors claim that Greenwood and Ignatova were aware from the beginning that their venture was a Ponzi scheme and referred to the concept as a “trashy coin” in emails. In one email, Greenwood called investors “crazy” and “idiots” to have fallen for their trap.
Greenwood Was Arrested While Ignatova Fled To Bulgaria
In an email sent in 2014, Ignatova proposed an exit strategy for the pair, suggesting that they should “take the money and run” and put the blame on somebody else, which was exactly what happened when she escaped to Bulgaria in October 2017.
Nine months later, in July 2018, Greenwood was arrested by the FBI at his home in Thailand and extradited to the United States to face criminal charges.
Both co-founders started to pitch OneCoin to various investors in North America and Europe in 2014. They hosted online webinars and investor conferences where potential investors were prompted to deposit funds into an account that would allow them to purchase OneCoin packages. These packages ranging from “Starter” to “Tycoon Trader” promised buyers a fivefold or tenfold return on their investment.
Prosecutors say the partners used the investor money to buy luxury homes and apartments, designer clothes, yachts, and watches. The pair purchased properties in Spain, Thailand, and Dubai. There are also allegations that Greenwood used the funds to conduct a world tour in a OneCoin-branded private jet.
Greenwood pleaded guilty to his crimes in December 2022 and was charged with wire fraud, conspiracy to commit wire fraud, and conspiracy to launder money. He was sentenced to 20 years in prison on September 18 and was also ordered to forfeit about $300 million that he made from the pyramid scheme.
FBI Offering $250,000 Reward For Information On Cryptoqueen’s Whereabouts
Ignatova was charged with counts of financial fraud and money laundering in October 2017 but fled the country days after the warrant was issued. The DoJ says she has not been seen publicly ever since.
The FBI is offering a reward of up to $250,000 for anyone with information leading to the arrest of the only women on its Top 10 Most Wanted Fugitives list. Authorities say she is believed to be traveling with armed guards and other associates and may have altered her appearance by getting plastic surgery.