Karl Sebastian Greenwood, a pioneer and marketer in the crypto exchange industry, has been sentenced to 20 years in prison for his involvement in the $4 billion OneCoin scam.
Greenwood, as the co-founder of OneCoin, played a key role in the fraudulent cryptocurrency scheme, which generated 4 billion euros ($4.3 billion) in revenue and 2.7 billion euros ($2.93 billion) in profits between 2014 and 2016.
The scheme, considered the largest criminal fraud in cryptocurrency history at the time, affected nearly 3.5 million people worldwide. OneCoin operated as a multilevel marketing scheme, rewarding commissions for recruiting new participants. Greenwood collaborated with Ruja Ignatova, known as the “Cryptoqueen,” who is currently on the FBI’s most-wanted criminal list.
While promoting OneCoin as the next Bitcoin, Greenwood was the primary promoter of the pyramid scheme. Prosecutors estimate that he made around $300 million from the scam. He used a significant portion of these illicit gains to purchase properties in Spain, Dubai, and Thailand, as well as indulging in luxury trips, designer clothes, and a down payment on a Sunseeker yacht.
United States District Judge Edgardo Ramos emphasized the massive scale of the fraud, highlighting the absence of a blockchain, real cryptocurrency, and trading market in OneCoin. Victims were unable to withdraw their investments, making it unlikely that they would ever recover their funds. Judge Ramos described the scheme as nothing more than “old-fashioned snake oil.”
Meanwhile, Ruja Ignatova, the Cryptoqueen, remains at large. She was recently spotted in London and is the only woman on the FBI’s most-wanted list. A $100,000 bounty has been offered for information leading to her capture.