Karl Sebastian Greenwood, the co-founder of OneCoin, who pleaded guilty in December, has been sentenced to 20 years in prison.
Karl Sebastian Greenwood, one of the key architects behind the OneCoin pyramid scheme that defrauded investors out of $4 billion, has been handed a 20-year prison sentence. The ruling was issued in a New York court earlier today, following Greenwood’s December admission of guilt in fabricating and promoting the fake digital currency.
Greenwood served as the right-hand man to Ruja Ignatova, infamously referred to as the “Cryptoqueen,” who continues to evade authorities and remains on the FBI’s most-wanted list. However, reports from earlier this year suggested that Ignatova might have been murdered back in 2018.
The infamous deception of OneCoin
Presiding over the case, US District Judge Edgardo Ramos highlighted the extraordinary deception involved. The scheme operated under the pretense of being a genuine cryptocurrency platform. However, OneCoin had no attributes of a typical digital currency — it lacked a blockchain, a real trading market, and even a token.
Investors found themselves trapped in an intricate web of deceit, unable to extract their capital, with Ramos calling the scam “old-fashioned snake oil.”
This sentencing concludes a major segment in the ongoing investigation into OneCoin, an operation dubbed by authorities as one of the largest pyramid frauds in history. The scheme affected approximately 3.5 million people all over the world and acted as a harbinger for intensified regulatory scrutiny over digital assets.
OneCoin fraudulently reported generating revenues of 4 billion euros ($4.3 billion) and profits amounting to 2.7 billion euros ($2.93 billion) from 2014 to 2016. The operation utilized a multi-level marketing strategy, offering lucrative commissions to people around the world to enlist others into purchasing OneCoin packages.
Throughout the scheme, Greenwood and Ignatova falsely assured prospective investors that OneCoin was poised to rival Bitcoin (BTC) in value and utility.
Greenwood’s financial gains
Prosecutors indicate that Greenwood accrued personal gains amounting to $300 million, squandering them over luxury residences in Spain, Dubai, and Thailand. He also indulged in extravagant travel aboard a OneCoin-branded private jet and luxury items, including a deposit for a Sunseeker yacht.
The court has mandated Greenwood to relinquish his illicit gains, forfeiting $300 million as part of the sentencing. In a prewritten statement, Greenwood expressed remorse for the lives he’s shattered, though that is unlikely to offer solace to the millions who fell victim to this monumental scam.
“The pain I caused others – the victims – I cannot take it back. I’m deeply sorry. I destroyed my life and caused irreparable harm to many others,” Greenwood read from a statement during the hearing.
Greenwood was arrested back in 2018 in Thailand, where he was imprisoned and later extradited to the US.