OneCoin co-founder pleads guilty to $4 billion fraud
- Reference: 1671525012
- News link: https://www.theregister.co.uk/2022/12/20/crypto_ponzi_scheme_cofounder_pleads/
- Source link:
Karl Sebastian Greenwood, co-founder of sham "Bitcoin-killer" OneCoin, offered a different interpretation of the supposed cryptocurrency on Friday when he pleaded guilty in Manhattan federal court to charges of conspiring to defraud investors and to launder money.
Greenwood was arrested in Thailand in July 2018 and subsequently extradited to the US. OneCoin's other co-founder, "Cryptoqueen" Ruja Ignatova ( [2]Dr. Ruja Ignatova – she has a law degree), remains a fugitive on the [3]FBI's Ten Most Wanted list and on [4]Europol's Most Wanted list .
[5]
"As a founder and leader of OneCoin, Karl Sebastian Greenwood operated one of the largest international fraud schemes ever perpetrated," said US Attorney Damian Williams in [6]a statement . "Greenwood and his co-conspirators, including fugitive Ruja Ignatova, conned unsuspecting victims out of billions of dollars, claiming that OneCoin would be the 'Bitcoin killer.' In fact, OneCoins were entirely worthless."
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The US has charged at least nine individuals across four related cases, including Greenwood and Ignatova, with [9]fraud [10]charges related to OneCoin. Authorities in China have [11]prosecuted 98 people accused of trying to sell OneCoin. Police in India [12]arrested 18 for pitching the Ponzi scheme.
According to the Justice Department, Greenwood and Ignatova founded OneCoin in Sofia, Bulgaria, in 2014. Until 2017 or so, they're said to have marketed OneCoin as a cryptocurrency to investors. The OneCoin exchange was shut down in January 2017, but trades evidently continued among affiliated individuals for some time. The OneCoin.eu website remained [13]online until 2019.
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In fact, OneCoin was a multi-level marketing (MLM) pyramid scheme in which network members received commissions when they managed to recruit people to buy OneCoin. The firm's own promotional materials claim more than three million people invested. And between Q4 2014 and Q4 2016, company records claim OneCoin generated more than $4.3 billion in revenue and $2.9 billion in purported profits.
At the top of the MLM pyramid, Greenwood is said to have earned $21 million per month. Greenwood and others claimed that OneCoin was mined using computing power like BitCoin and recorded on a blockchain. But it wasn't.
As Ignatova allegedly put it in an email to Greenwood, "We are not mining actually – but telling people shit."
[15]Three things that have vanished: $3.6bn in Bitcoin, a crypto investment biz, and the two brothers who ran it
[16]OneCoin lawyer trial kicks off in NY as cryptocurrency founder remains on the lam
[17]CryptoQueen on the run from Feds, lawsuit after her OneCoin slammed as 'an old-school pyramid scheme on a new-school platform'
[18]It could be Rotterdam or anywhere, Wiltshire or in Bath: Euro cops cuff 6 for cybersquatting, allegedly nicking €24m in Bitcoin
OneCoin's value, according to the Feds, was simply set by those managing the company – they manipulated the OneCoin exchange to simulate trading volatility but the price of OneCoin always closed higher than it opened.
In an August 1, 2015 email, Ignatova allegedly told Greenwood that one of the goals for the OneCoin trade exchange was "always close on a high price end of day open day with high price, build confidence – better manipulation so they are happy."
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According to the Justice Department, the value assigned to OneCoin grew steadily from €0.50 ($0.53) to approximately €29.95 ($31.80) per coin and never declined.
Greenwood, a 45-year-old citizen of Sweden and the United Kingdom, pleaded guilty to one count each of conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering. Each carries a maximum penalty of 20 years in prison.
Greenwood described Ignatova as the "the creator, the mastermind, the founder of cryptocurrency" at an event called "Coin Rush" that was held at Wembley Arena in London on June 11, 2016.
Email correspondence between Greenwood and Ignatova, as cited by the Justice Department, describes how the defendants referred to OneCoin privately as "trashy coin." And in an August 9, 2014 email exchange with Greenwood, Ignatova's first option on a list of possible exit strategies is said to have been, "Take the money and run and blame someone else for this…"
Records show Ignatova traveled from Sofia, Bulgaria, to Athens, Greece, on October 25, 2017 and presently her whereabouts remain unknown. For information that leads to her arrest, the US Federal Bureau of Investigation is offering a reward of $100,000 – in fiat currency. ®
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[1] https://www.youtube.com/watch?v=I8oYt0mBdFY
[2] https://www.youtube.com/watch?v=qSUztB9axtk
[3] https://www.fbi.gov/wanted/topten/ruja-ignatova
[4] https://eumostwanted.eu/#/ignatova-ruja
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y6GVzZoZdBHvCy1utPs4GAAAAEk&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[6] https://www.justice.gov/usao-sdny/pr/co-founder-multi-billion-dollar-cryptocurrency-pyramid-scheme-onecoin-pleads-guilty
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y6GVzZoZdBHvCy1utPs4GAAAAEk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y6GVzZoZdBHvCy1utPs4GAAAAEk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[9] https://www.justice.gov/usao-sdny/pr/former-partner-locke-lord-llp-convicted-manhattan-federal-court-conspiracy-commit-money
[10] https://www.bbc.com/news/technology-50417908
[11] https://www.scmp.com/tech/article/2148114/china-prosecutes-98-people-recovers-us268-million-onecoin-cryptocurrency
[12] https://www.thehindu.com/news/cities/mumbai/18-held-for-organising-ponzi-scheme-seminar/article18202122.ece
[13] https://cointelegraph.com/news/onecoin-website-goes-offline-as-net-closes-in-on-4b-ponzi-scheme
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y6GVzZoZdBHvCy1utPs4GAAAAEk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[15] https://www.theregister.com/2021/06/23/africrypt_bitcoin_disappearance/
[16] https://www.theregister.com/2019/11/05/cryptocurrency_scam_onecoin/
[17] https://www.theregister.com/2019/05/08/onecoin_fraud_lawsuit/
[18] https://www.theregister.com/2019/06/26/euro_cops_slaps_cuffs_on_six_bods_for_cryptofraud/
[19] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y6GVzZoZdBHvCy1utPs4GAAAAEk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[20] https://whitepapers.theregister.com/
...and run.
Turns out talking the money was easy. But it seems only Ignatova got the second part right. This might suggest she did some proper planning for the running part. You never know, but I doubt they will ever find her.
Re: ...and run.
I thought I had seen a theory that she is currently pushing up daisies, and that whomever did the dirty deed is currently enjoying the benefits of her nefarious labour.
-------> Maybe what her 'Wanted' poster should look like!
Ouch
first option on a list of possible exit strategies is said to have been, "Take the money and run and blame someone else for this…"
I bet he never thought he was the “someone else”
"As Ignatova allegedly put it in an email to Greenwood"
Why did this stuff need to be put in writing ? Didn't the two shysters know what they were doing, or was the lady giving an ABC to a newbie ?
It baffles me how criminals seem to universally love documenting their crimes to one another. Oh, look how smart we are, we're pulling this scam on stupid people with money. Ha Ha, life is fun, isn't it ?
Sure, real fun. Right up until the prosecution pulls out that email destroying your defense based on "not my fault, Your Honor, I didn't know this was going on".
In any case, the smart one obviously has the skirt in this case. Though I'm willing to bet she's blonde now.
Re: "As Ignatova allegedly put it in an email to Greenwood"
Much of the speculation about Ignatova's whereabouts suggests she's gone underground... in a very literal sense. She ripped off people who were wealthy and shady in equal measure, after all.
"The Missing Cryptoqueen" is still available from the BBC
(a couple of updates were added a couple of months ago)
We are not mining actually – but telling people shit
What difference does it make? Burning millions in real money on electricity to produce meaningless strings of bits and claiming that it "creates value" is also telling people shit.
"an MLM scheme"
Defined the crypto market in one easy bitesize chunk.
Switch them all off.
A while back the BBC ran an excellent Podcast called "The Missing Crypto Queen", which is well worth a listen - in particular for interviews with early adopters who bough in heavily, convinced their friends & family to do the same, and defended the cult, but who have now seen the light. The investigative journalists behind it are still on the case and there are occasional updates as they continue to track Dr Ruja.
"In fact, OneCoins were entirely worthless."
Well, they were at least on par with Bitcoin, if not a Bitcoin killer ...