Karl Greenwood, co-founder of the fraudulent cryptocurrency OneCoin, was sentenced to 20 years in prison and ordered to pay $300 million on Tuesday. The sentence was handed down by the U.S. Southern District Court of New York. Greenwood, a citizen of both the United Kingdom and Sweden, had been in custody since his extradition from Thailand in 2018.
Greenwood, alongside Ruja Ignatova who remains at large, founded OneCoin in 2014. The U.S. Justice Department labelled it “one of the largest fraud schemes ever perpetrated,” with the multilevel marketing and Ponzi scheme allegedly defrauding 3.5 million victims out of $4 billion. The OneCoin team compared its product to Bitcoin (BTC) in sales pitches, despite lacking a legitimate blockchain or mining operations.
U.S. Attorney Damien Williams stated that unlike legitimate cryptocurrencies, OneCoin had no actual value. "As a founder and leader of OneCoin, Karl Sebastian Greenwood operated one of the largest fraud schemes ever perpetrated. Greenwood and his co-conspirators conned unsuspecting victims out of billions of dollars with promises of a ‘financial revolution' and claims that OneCoin would be the ‘Bitcoin killer,'” said Williams.
Greenwood pleaded guilty to charges of fraud and money laundering in December. He could have faced up to 60 years in prison. Prosecutors accused him of using investor money for luxury goods and lifestyle expenses, including five-star resorts, a private plane, and a yacht. Greenwood is said to have made over $300 million through a 5% commission on all OneCoin sales.
Ignatova, also known as the Crypto Queen, has not been seen since October 2017 and is currently on the Federal Bureau of Investigation’s Ten Most Wanted List. Other OneCoin executives are also facing justice. Former head of legal and compliance Irina Dilkinska was charged in the United States with one count of wire fraud and one count of conspiracy to commit money laundering in March. Ignatova associate Christopher Hamilton was reportedly set to be extradited to the United States on fraud and money laundering charges in August 2022.
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