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One of the co-founders of the OneCoin pyramid scheme, Karl Greenwood, has been sentenced to 20 years in prison by the federal court in the Southern District of New York, the Attorney’s Office said in a press release on 12 September.
According to the announcement, Greenwood — who co-founded OneCoin alongside Ruja Ignatova — was not only sentenced to 20 years in prison but also ordered to pay $300 million in penalties, the approximate amount he stole through the crypto scheme. U.S. Attorney Damian Williams said that Greenwood operated “one of the largest fraud schemes ever perpetrated”, and also noted:
“OneCoins were entirely worthless, and investors were left with nothing, while Greenwood lined his own pockets with over $300 million. We hope this lengthy sentence resonates in the financial sector and deters anyone who may be tempted to lie to investors and exploit the cryptocurrency ecosystem through fraud.”
Greenwood has been in U.S. custody since 2018, when he was extradited from Thailand, and has since pleaded guilty to charges of fraud and money laundering. The Department of Justice (DoJ) noted that he was the “global master distributor and the leader of the MLM (multi-level marketing) network”, which earned him 5% of the OneCoin monthly market sales, or roughly $300 million.
OneCoin — which defrauded more than $4 billion from 3.5 million victims — was launched from Bulgaria in 2014, and marketed itself to investors as a cryptocurrency that could be mined and had real value, despite being a pyramid scheme where investors were rewarded for bringing new participants. Its other co-founder, Ruja Ignatova, has not been seen since October 2017, and has since landed on the Federal Bureau of Investigation’s (FBI) Ten Most Wanted List.