OneCoin: How Bitcoin-killer scammed investors of $4bn, founders plead guilty, disappear

OneCoin, a cryptocurrency asset that was supposed to kill off Bitcoin (BTC) and promoted to give crypto investors more value for their investment than BTC, ended up becoming one of the world’s largest cryptocurrency scam.

The firm, founded in 2014, has been a subject of investigation since the co-founder, Ruja Ignatova, known as the Cryptoqueen fled in 2017 to avoid charges for defrauding millions of investors.

What you need to know

Karl Greenwood, the mastermind behind OneCoin’s global marketing and an associate of the Cryptoqueen, has pleaded guilty to federal charges of wire fraud after conning the unsuspecting cryptocurrency victims.

According to a U.S. Department of Justice (DoJ) statement dated December 16, and obtained by Ripples Nigeria on Saturday, Greenwood also pleaded to money laundering for his role in selling OneCoin to scam investors seeking investable assets.

Recall that Ignatova’s brother, Konstantin Ignatov was arrested in March 2019. He was charged with wire fraud conspiracy, and pleaded guilty to participating in the multi-billion-dollar pyramid scheme that defrauded investors out of $4 billion.

Ignatov, who indicted his sister, faces up to 90 years in prison for his involvement, but his sentencing was postponed for 90 days in November 2022.

How OneCoin founders defrauded investors

Cryptoqueen, Ignatov, and Greenwood initiated a global multi-level-marketing (MLM), similar to the strategy used by MMM (a popular pyramid scheme once operated in Nigeria) to sale OneCoin to unsuspecting investors.

The global multi-level-marketing was operated in a way interested investors or members of OneCoin receive commissions for recruiting others to purchase their cryptocurrency packages. This was mouth-watering incentives that quick cash seekers could not ignore.

OneCoin used this strategy to grow their member network to three million, and at some point, between Q4 2014 and Q3 2016, the firm made a whopping €4.037 billion in sales revenue, earning €2.735 billion in profit.

They positioned their OneCoin as a better option to Bitcoin, which is the crypto market’s most valuable asset since it was created in 2009 by an unknown person or group of people using the name Satoshi Nakamoto.

Due to their success rate, Greenwood earned approximately €20 million a month in his role as the top MLM distributor of OneCoin, and was praised by the Cryptoqueen for the idea MLM idea used in marketing and selling OneCoin.

Ripples Nigeria gathered that contrary to their claims of OneCoin being a Bitcoin-killer, the crypto coins promoted by the three were entirely worthless.

However, Greenwood designed and sold lies with the goal “to get everyday people all over the world to part with their hard-earned money — real money — and to line his own pockets to the tune of hundreds of millions of dollars,” the DoJ statement reads.

U.S. Attorney, Damian Williams, said, “Greenwood and his co-conspirators, including fugitive Ruja Ignatova, conned unsuspecting victims out of billions of dollars, claiming that OneCoin would be the ‘Bitcoin killer.’ In fact, OneCoins were entirely worthless.”

Read also:Cryptoqueen joins most wanted fugitives list, after duping investors of $4bn

Williams stated, “As a founder and leader of OneCoin, Karl Sebastian Greenwood operated one of the largest international fraud schemes ever perpetrated.”

Cryptoqueen’s idiot investors and powerful backers

Despite the Cryptoqueen being on the Federal Bureau of Investigation’s Top Ten Most Wanted List in June 2022, she remains at large, leaving Greenwood and Ignatov to answer for OneCoin’s crime.

Reports revealed she was last seen boarding a flight to Greece in 2017 from Bulgaria. She had been planning her exit since 2014, the same year OneCoin was created.

According to the statement obtained, Greenwood described investors of OneCoin as “idiots” and her brother confirmed that the Cryptoqueen was right to state that OneCoin wouldn’t have worked with intelligent people.

“In an August 9, 2014, email between GREENWOOD and IGNATOVA, IGNATOVA described her thoughts on the “exit strategy” for OneCoin.” the DoJ statement reads, adding that “The first option that IGNATOVA listed was, “Take the money and run and blame someone else for this . . . .”

Also, the statement disclosed that, “And in a September 11, 2016, exchange with IGNATOVA’s brother, Konstantin Ignatov, GREENWOOD referred to OneCoin investors stating, “These ppl are idiots,” to which Ignatov responded, “as you told me, the network would not work with intelligent people.”

Meanwhile, according to founder of investigative journalism-oriented publication, Inner City Press, Matthew Russell Lee, the Cryptoqueen has the protection of an unnamed “rich and powerful” Russian citizen. Also, prior to her disappearance, Ignatov said his sister met with Russian speakers.

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