In a significant development, OneCoin’s co-founder, Karl Greenwood, received a hefty 20-year prison sentence from a federal court in the Southern District of New York due to his participation in the notorious pyramid scheme. The office of the prosecuting attorney, in a recent statement, highlighted that Greenwood has also been instructed to forfeit an approximate $300 million, a sum equivalent to his earnings from the scheme.
Emerging from Bulgaria in 2014, OneCoin positioned itself as a cryptocurrency, encouraging investors with promises of mineable tokens carrying real value. However, reality painted a different image. OneCoin had no existence on the blockchain, forming a pyramid scheme where investors reaped rewards for incorporating new participants.
This global phenomenon amassed a staggering $4 billion, dishonestly taken from no less than 3.5 million victims. Greenwood’s role in this deception was integral. As allegedly detailed by the attorney’s office, he served as OneCoin’s “global master distributor” and steered the multi-level marketing network utilized for the marketing and sale of the falsely labeled cryptocurrency. This influential position led to Greenwood earning 5% of OneCoin’s monthly sales across the globe.
Greenwood’s arrest took place in Thailand back in 2018, resulting in his extradition to the U.S., where he remained in custody during trial preparation. Last December saw Greenwood pleading guilty to charges of wire fraud and conspiracy to launder money.
Interestingly, co-founder of the scheme, Ruja Ignatova, aka, the “CryptoQueen,” remains elusive. She was listed in the Federal Bureau of Investigation’s (FBI) Most Wanted list last year and continues to evade arrest.
This landmark sentencing is a reminder of the necessity for regulatory insight in the expanding crypto world. While the concept of decentralization and lack of government control is appealing to many, the absence of regulation opens the door to such scams. Proponents could argue that the traditional banking system has its share of scandals and fraud, yet the rise of crypto-related scams underscores the need for a level of industry regulation to prevent cases like OneCoin from repeating.
Source: Coindesk
