Crypto exchange pioneer and marketer, Karl Sebastian Greenwood has been sentenced to 20 years in prison for the part he played in the $4 billion OneCoin scam.
Greenwood Defrauds Investors in Crypto Scheme
Greenwood was the co-founder of the phony cryptocurrency scheme OneCoin which generated 4 billion euros ($4.3 billion) in revenue and 2.7 billion euros ($2.93 billion) in profits between 2014 and 2016.
When the scheme finally went sour, it was regarded as the first and biggest criminal fraud involving cryptocurrency in history at the time. Globally, almost 3.5 million people were impacted by the illicit scheme.
OneCoin operated as a multilevel marketing scheme that rewarded commission to people for recruiting others to the scheme. Greenwood worked together with Ruja Ignatova, the so-called “Cryptoqueen” who is now on the United States Federal Bureau of Investigation’s most wanted criminal list.
Both of them touted OneCoin as the next Bitcoin (BTC) in the crypto ecosystem but at the same time, Greenwood was the main promoter of the pyramid scheme.
Accrued Gains from OneCoin Scam
According to prosecutors, Greenwood made as much as $300 million from the scam. He used a significant part of this profit to purchase properties in Spain, Dubai and Thailand. Additionally, he went on a luxury trip in a private OneCoin jet, bought designer clothes and made a down payment on a Sunseeker yacht.
United States District Judge Edgardo Ramos stated that the fraud was massive in all respect. He highlighted some of the misgivings of the crypto scheme which gave it out as a red flag. First, he cited that OneCoin had no blockchain, no real cryptocoin and no trading market. In the entities, victims could not withdraw their investments and it is not likely that they would ever get their monies back.
“At base, it involved nothing more than old-fashioned snake oil,” Judge Ramos added.
On the other hand, Ignatova “CryptoQueen” is still at large but earlier this year, she was spotted in the heart of London. She is the only woman on the FBI’s most-wanted list at this time and has been added to the FBI’s list of the top 10 most-wanted fugitives. She has a $100,000 bounty reward on her head for anyone who can provide information on her current whereabouts.
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