OneCoin Co-Founder Pleads Guilty To $4 Billion Fraud

Karl Sebastian Greenwood, co-founder of sham "Bitcoin-killer" OneCoin, pleaded guilty in Manhattan federal court to charges of conspiring to defraud investors and to launder money. "Greenwood was arrested in Thailand in July 2018 and subsequently extradited to the US," reports The Register. "OneCoin's other co-founder, 'Cryptoqueen' Ruja Ignatova (Dr. Ruja Ignatova -- she has a law degree), remains a fugitive on the FBI's Ten Most Wanted list and on Europol's Most Wanted list." From the report: "As a founder and leader of OneCoin, Karl Sebastian Greenwood operated one of the largest international fraud schemes ever perpetrated," said US Attorney Damian Williams in a statement. "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." The US has charged at least nine individuals across four related cases, including Greenwood and Ignatova, with fraud charges related to OneCoin. Authorities in China have prosecuted 98 people accused of trying to sell OneCoin. Police in India arrested 18 for pitching the Ponzi scheme. According to the Justice Department, Greenwood and Ignatova founded OneCoin in Sofia, Bulgaria, in 2014. Until 2017 or so, they're said to have marketed OneCoin as a cryptocurrency to investors. The OneCoin exchange was shut down in January 2017, but trades evidently continued among affiliated individuals for some time. The OneCoin.eu website remained online until 2019. In fact, OneCoin was a multi-level marketing (MLM) pyramid scheme in which network members received commissions when they managed to recruit people to buy OneCoin. The firm's own promotional materials claim more than three million people invested. And between Q4 2014 and Q4 2016, company records claim OneCoin generated more than $4.3 billion in revenue and $2.9 billion in purported profits. At the top of the MLM pyramid, Greenwood is said to have earned $21 million per month. Greenwood and others claimed that OneCoin was mined using computing power like BitCoin and recorded on a blockchain. But it wasn't. As Ignatova allegedly put it in an email to Greenwood, "We are not mining actually -- but telling people shit." OneCoin's value, according to the Feds, was simply set by those managing the company -- they manipulated the OneCoin exchange to simulate trading volatility but the price of OneCoin always closed higher than it opened. In an August 1, 2015 email, Ignatova allegedly told Greenwood that one of the goals for the OneCoin trade exchange was "always close on a high price end of day open day with high price, build confidence -- better manipulation so they are happy." According to the Justice Department, the value assigned to OneCoin grew steadily from $0.53 to approximately $31.80 per coin and never declined.

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