OneCoin Co-Founder Sentenced to 20 Years in Prison for $4 Billion Fraud

By Kanishka Singh and Jody Godoy

(Reuters) – A federal judge in New York sentenced the co-founder of the purported cryptocurrency OneCoin to 20 years in prison on Tuesday for what prosecutors called a $4 billion fraud.

Background

Karl Sebastian Greenwood, a dual citizen of Sweden and the United Kingdom, pleaded guilty to fraud and money laundering charges in December 2022. He has been detained in New York since his 2018 arrest in Thailand and extradition to the United States over his role in promoting OneCoin.

Sentence and Forfeiture

U.S. District Judge Edgardo Ramos in Manhattan sentenced Greenwood to 20 years in prison and ordered him to forfeit $300 million.

Prosecutors’ Claims

• Prosecutors sought a sentence of at least 30 years for Greenwood.
• They described Greenwood as OneCoin’s “primary promoter” who falsely touted it as the next Bitcoin.
• According to prosecutors, OneCoin was a pyramid scheme that defrauded at least 3.5 million people.

Defense’s Argument

Greenwood’s attorneys had requested a sentence of time served, citing harsh conditions during his detention.

Co-Founder and FBI’s Most-Wanted

Greenwood founded OneCoin in Sofia, Bulgaria in 2014 alongside Ruja Ignatova, also known as the ‘Cryptoqueen.’ Ignatova, a German citizen, is currently on the FBI’s top ten most-wanted list.

Upcoming Trial

Prosecutors in Manhattan are preparing for the trial of FTX founder Sam Bankman-Fried, who has pleaded not guilty to fraud and conspiracy charges related to the collapse of his now-bankrupt cryptocurrency exchange in November 2022.

Conclusion

The sentencing of Karl Sebastian Greenwood highlights the consequences of fraudulent activities in the cryptocurrency industry. As the trial of another prominent figure, Sam Bankman-Fried, approaches, the legal scrutiny on cryptocurrency exchanges and their founders continues.

(Reporting by Kanishka Singh in Washington and Jody Godoy in New York; Editing by Jonathan Oatis and Timothy Gardner)