Karl Greenwood, the co-founder of infamous crypto scam OneCoin, has been sentenced to 20 years in prison by a New York judge.
US District Judge Edgardo Ramos, who presided over Greenwood’s sentencing, characterized the fraud in the OneCoin case as “massive in many respects” and likened it to “old-fashioned snake oil.”
OneCoin lacked a blockchain, and had no real cryptocurrency or market for trading.
Additionally, victims who invested in OneCoin were unable to withdraw their money again.
Greenwood, who founded OneCoin together with Ruja Ignatova, actively promoted the phony cryptocurrency, falsely assuring victims that OneCoin would rival Bitcoin.
Greenwood pleaded guilty to the charges against him in December last year.
Ruja Ignatova, known as “Cryptoqueen,” has never been arrested and her whereabouts are unknown, although one report has indicated she may have been killed by a drug lord in 2018.
The report about the alleged murder came after a London penthouse believed to be owned by Ignatova was put up for sale for £11 million in January this year.
Ignatova was last year added to the FBI’s 10 Most Wanted Fugitives list.
Money spent on personal luxury goods
According to prosecutors, Greenwood personally made $300 million from the scheme, which he spent on luxury properties, travel, designer clothing, and other extravagances. He was ordered to forfeit $300 million.
Commenting on the sentencing, Damian Williams, US Attorney for the Southern District of New York, said that Greenwood operated one of the largest fraud schemes in recorded history.
“Greenwood and his co-conspirators, including fugitive Ruja Ignatova, conned unsuspecting victims out of billions of dollars with promises of a ‘financial revolution’ and claims that OneCoin would be the ‘Bitcoin killer,’” Williams said, while noting that OneCoins were in fact worthless and investors were left with nothing.
“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,” he added.
OneCoin was a crypto-based pyramid scheme that was promoted through a multi-level marketing (MLM) network.
The scheme took in well over $4 billion from more than 3.5 million victims across the world between 2014 and 2016 alone.