OneCoin co-founder Karl Greenwood sentenced to 20 years in prison

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OneCoin co-founder Karl Sebastian Greenwood has been sentenced to 20 years behind bars for his role in the $4 billion cryptocurrency scam.

Greenwood, a U.K. and Swedish citizen, was arrested in July 2018 at his home in Koh Samui, Thailand. He was extradited to the U.S. for his trial and pleaded guilty to money laundering and wire fraud later that year. He faced 60 years behind bars for his crimes.

A U.S. court in Manhattan has sentenced the 46-year-old to two decades in prison in connection with his role in the OneCoin scam and ordered him to pay $300 million in forfeiture.

Greenwood co-founded OneCoin in 2014 in Sofia, Bulgaria, alongside Ruja “Cryptoqueen” Ignatova. Cryptoqueen has been missing since 2017 and was last seen boarding a Ryanair flight from Sofia to Athens, Greece. She is on the Federal Bureau of Investigation’s (FBI) Most Wanted List, with the bureau offering $250,000 to anyone whose information leads to her arrest.

The two pushed OneCoin through a global multi-level marketing scheme that lured over 3.5 million investors. In the two years up to Q4 2016, they solicited over $4 billion, promising investors that OneCoin was “the new Bitcoin,” which presented a “can’t-miss investment opportunity.”

While Cryptoqueen was the public face of the scam, Greenwood was central to its operation, and it was he who conceived of the MLM structure that proved very successful. As the global master distributor, he oversaw the marketing of the worthless OneCoin tokens.

Prosecutors say he earned 5% of all OneCoin sales globally, totaling over $300 million, before authorities cracked down on the scam.

OneCoin was deployed on a private ledger, allowing Greenwood and Cryptoqueen to arbitrarily set its value with no regard to market forces of supply and demand. In the two years it existed, it went from $0.54 to $32.17; not once did the price of OneCoin decrease.

“We hope this lengthy sentence resonates in the financial sector and deters anyone who may be tempted to lie to investors and exploit the cryptocurrency ecosystem through fraud,” commented Damian Williams, the U.S. Attorney for the Southern District of New York.

Authorities are still on the hunt for the main perpetrator of the scam—Ruja Ignatova. Rumors abound about what happened to the infamous Cryptoqueen since her disappearance seven years ago.

According to the FBI, she might have undergone plastic surgery, allowing her to hide in plain sight.

Other rumors have claimed that the German citizen was shot and tossed into the sea in 2018 by a Bulgarian drug lord involved in the OneCoin scam to cover his tracks.

Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.