Saturday, June 3, 2023

Founder of bogus ‘Bitcoin killer’ cryptocurrency pleads guilty

NEW YORK (AP) – A co-founder of fraudulent cryptocurrency OneCoin, a pyramid scheme that swindled billions of dollars from investors around the world, has pleaded guilty to wire fraud and money laundering charges, US prosecutors said Friday.

Prosecutors known as the “Bitcoin killer” say the cryptocurrency, co-founded by Ruja Ignatova and Karl Sebastian Greenwood in 2014 in Bulgaria, was actually worthless. Although marketed as a cryptocurrency, it was never mined using computers and had no public and verifiable blockchain. OneCoin’s value was not determined by supply and demand, but by its operators, he said.

Greenwood, 45, was arrested in 2018 at his island residence in Thailand and extradited to the United States. He pleaded guilty Friday in federal court in Manhattan.

Greenwood, a citizen of Sweden and the United Kingdom, has been detained since his arrest.

US Attorney Damien Williams said Greenwood helped operate one of the largest international fraud schemes in history. His office said the victims invested more than $4 billion.

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“Greenwood’s lie was designed with one goal in mind, to defraud everyday people around the world of their hard-earned money – real money – and hundreds of millions of dollars into their own pockets,” Williams said in a statement.

Ignatova, nicknamed Cryptoqueen and described as a top leader of OneCoin, disappeared in October 2017 and remains at large. In June, he was added to the FBI’s Top Ten Most Wanted list and offered a $100,000 reward for information leading to his arrest.

OneCoin’s growth was fueled by multi-level marketing, in which members received commissions for recruiting others to purchase cryptocurrency wallets.

Although Ignatova claimed that OneCoin would be a “bitcoin killer”, she and Greenwood referred to it as a “trash coin” in email correspondence. In an email, Greenwood called investors idiots.

Greenwood pleaded guilty to one count of conspiracy to commit wire fraud, one count of wire fraud and one count of conspiracy to commit money laundering. Each count carries a maximum sentence of 20 years in prison.

He will be sentenced on April 5.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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