On September 12th, a judge handed down a 20-year prison sentence to a prominent co-founder of OneCoin for orchestrating an extensive cryptocurrency scheme that defrauded millions of investors worldwide, totaling over $4 billion.
Karl Sebastian Greenwood promoted OneCoin as a legitimate alternative to Bitcoin. However, the project lacked value from its inception. He orchestrated the fraudulent operation through a complex pyramid scheme, enticing recruits with promises of wealth.
The United States Attorney for the Southern District of New York revealed that Greenwood devised OneCoin’s global multi-level marketing framework, incentivizing members to recruit new victims. As the top distributor, he amassed more than $200 million in commissions within a mere two-year period.
In December 2022, Greenwood initially admitted guilt to charges of wire fraud and money laundering.
OneCoin did not engage in coin mining, nor did it possess a blockchain. It arbitrarily fabricated false valuations that consistently appreciated over time. Nevertheless, Greenwood’s persuasive sales tactics led believers to perceive it as an early investment opportunity akin to Bitcoin (BTC).
Victims were misled by the hype equating OneCoin with Bitcoin and asserting its potential to surpass the pioneering cryptocurrency. In reality, it lacked essential trading, mining, or verification processes, all of which are clear indicators of fraudulent activities.
Referring to OneCoin’s internal records, the announcement disclosed that between the fourth quarter of 2014 and the fourth quarter of 2016, OneCoin generated €4.037 billion in sales revenue and accrued €2.735 billion in profits.
US Attorney Damian Williams described it as “one of the most significant fraudulent schemes ever executed,” victimizing over 3.5 million individuals worldwide.
Meanwhile, Greenwood enjoyed a lavish lifestyle financed by his ill-gotten gains. He indulged in luxury items such as designer clothing, expensive watches, overseas real estate, and contributed to a down payment for a luxury yacht.
Furthermore, the fraudulent scheme facilitated extensive first-class travel aboard a private OneCoin jet, with investor funds also covering stays at luxury resorts and the rental of beachfront villas in exotic locations.
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.