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OneCoin co-founder pleads guilty to $4 billion fraud

“What is OneCoin?” asks the narrator a YouTube video. “Millions of people around the world are mining OneCoin today. The reason? It’s an innovation platform that is changing the financial industry.”

Karl Sebastian Greenwood, co-founder of bogus “Bitcoin-killer” OneCoin, offered a different take on the supposed cryptocurrency on Friday when he pleaded guilty in Manhattan federal court to conspiracy to defraud investors and to launder money.

Greenwood was arrested in Thailand in July 2018 and then extradited to the United States. OneCoin’s other co-founder, “Cryptoqueen” Ruja Ignatova (Dr Ruja Ignatova – she has a law degree), remains a fugitive on the FBI Ten Most Wanted List and on Europol most wanted list.

“As founder and leader of OneCoin, Karl Sebastian Greenwood operated one of the greatest international fraud schemes ever perpetrated,” US attorney Damian Williams said in a statement. A declaration. “Greenwood and his co-conspirators, including the fugitive Ruja Ignatova, defrauded unsuspecting victims out of billions of dollars, claiming that OneCoin would be the ‘Bitcoin Killer.’ In fact, OneCoins had no value.”

The United States has charged at least nine people in four related cases, including Greenwood and Ignatova, with fraud charges linked to OneCoin. Chinese authorities have prosecuted 98 people accused of attempting to sell OneCoin. Police in India arrested 18 for starting the Ponzi scheme.

According to the Ministry of Justice, Greenwood and Ignatova founded OneCoin in Sofia, Bulgaria in 2014. Until around 2017, they reportedly marketed OneCoin as a cryptocurrency to investors. The OneCoin exchange was shut down in January 2017, but transactions obviously continued between affiliates for some time. The OneCoin.eu website remained online until 2019.

In fact, OneCoin was a multi-level marketing (MLM) pyramid scheme in which members of the network received commissions when they managed to recruit people to buy OneCoin. The company’s promotional material claims more than three million people invested. And between Q4 2014 and Q4 2016, company records claim that OneCoin generated over $4.3 billion in revenue and $2.9 billion in purported profits.

At the top of the MLM pyramid, Greenwood reportedly earns $21 million per month. Greenwood and others claimed that OneCoin was mined using computing power like BitCoin and recorded on a blockchain. But that was not the case.

As Ignatova allegedly said in an email to Greenwood, “We don’t really mine – but we talk shit to people.”

The value of OneCoin, according to the Feds, was simply set by those running the company – they manipulated the OneCoin exchange to simulate trading volatility, but the price of OneCoin always closed higher than it did. opened.

In an August 1, 2015 email, Ignatova allegedly told Greenwood that one of the goals of the OneCoin trading exchange was “always close to a high priced open day at the end of the day with a high price, strengthen confidence – better handling so that they are happy”.

According to the Department of Justice, the value assigned to OneCoin has steadily increased from €0.50 ($0.53) to around €29.95 ($31.80) per coin and has never decreased.

Greenwood, a 45-year-old Swedish and British citizen, pleaded guilty to one count of conspiracy to commit wire fraud, wire fraud and conspiracy to launder money. Each carries a maximum sentence of 20 years in prison.

Greenwood described Ignatova as “the creator, the mastermind, the founder of cryptocurrency” at an event called “Coin Rush” held at Wembley Arena in London on June 11, 2016.

Email correspondence between Greenwood and Ignatova, cited by the Justice Department, describes how the defendants privately referred to OneCoin as a “trash coin.” And in an Aug. 9, 2014, email exchange with Greenwood, Ignatova’s first option on a list of possible exit strategies was reportedly, “Take the money and run and blame someone else for it… “

Records show that Ignatova traveled from Sofia, Bulgaria to Athens, Greece on October 25, 2017 and her current whereabouts are unknown. For any information leading to his arrest, the US Federal Bureau of Investigation is offering a reward of $100,000 – in fiat currency. ®

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