Benzinga - Karl Sebastian Greenwood, co-founder of the infamous OneCoin cryptocurrency, has been sentenced to 20 years in prison for his role in orchestrating one of the largest cryptocurrency fraud schemes in history.
The fraudulent operation, which began in 2014 and was based in Sofia, Bulgaria, deceived millions of investors worldwide, resulting in losses exceeding $4 billion, according to a statement released by the U.S. Attorney prosecuting the case.
The development comes ahead of the much-anticipated Benzinga's Future of Digital Assets conference on Nov. 14, where the implications of such high-profile cases on the future of the cryptocurrency industry will be among the focal points of discussion.
Damian Williams, the U.S. Attorney for the Southern District of New York, highlighted the severity of the fraud, stating, "Greenwood and his co-conspirators conned unsuspecting victims out of billions of dollars with promises of a ‘financial revolution.’"
He further emphasized that while Greenwood profited over $300 million, investors were left with worthless OneCoins.
The statement further said that OneCoin, which was marketed as a revolutionary cryptocurrency, was a sham from its inception and that the company falsely claimed that the value of OneCoin was based on market supply and demand.
It added that in reality, OneCoin arbitrarily set the coin's value, which never decreased.
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Greenwood and his co-founder, Ruja Ignatova, also known as "the Cryptoqueen", utilized the popularity of Bitcoin (CRYPTO: BTC) to lure investors into believing that OneCoin was a legitimate cryptocurrency.
The fraudulent scheme was further exposed when internal communications revealed that Greenwood and Ignatova were aware of the "fake coins" they were distributing, which did not exist on OneCoin's purported blockchain.
The duo's lavish lifestyles, funded by the fraud proceeds, included stays at luxury resorts, purchasing designer goods, and even traveling on a private "OneCoin" airplane.
Greenwood's arrest took place in July 2018 in Koh Samui, Thailand, and he has been detained since.
Meanwhile, Ignatova, who faces OneCoin-related fraud and money laundering charges, disappeared in 2017 and was added to the FBI’s Top Ten Most Wanted List in June 2022.
A reward of $100,000 has been announced by the FBI for information leading to her arrest.
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