One of the founders of the multi-billion dollar cryptocurrency pyramid scheme OneCoin pleads guilty

Damian Williams, United States Attorney for the Southern District of New York, announced today that Carl Sebastian Greenwood, co-founder of OneCoin with RUJA IGNATOVA, a/k/a “Cryptoqueen,” has pleaded guilty today in Manhattan federal court. fraud and money laundering charges in connection with his participation in the massive OneCoin scam scheme. OneCoin, which began operations in 2014 and was headquartered in Sofia, Bulgaria, has marketed and sold its namesake fraudulent cryptocurrency through a global multi-level marketing (“MLM”) network. As a result of the misrepresentations made by GREENWOOD, IGNATOVA, and others about OneCoin, victims have invested more than four billion dollars worldwide in the fraudulent cryptocurrency. Today, District Judge Edgardo Ramos accepted Greenwood’s guilty plea. IGNATOVA, who was added to the FBI’s Top Ten Most Wanted list in June 2022, remains at large.

US Attorney Damien Williams said: “As the founder and leader of OneCoin, Carl Sebastian Greenwood operated one of the largest international fraud schemes ever committed. Greenwood and his co-conspirators, including fugitive Ruja Ignatova, swindled unsuspecting victims out of billions of dollars, claiming that OneCoin He would be the “Bitcoin killer”. In fact, OneCoins were completely worthless. Greenwood’s lies were designed with one goal in mind, to make ordinary people around the world part with their hard-earned money – real money – and to line his pockets with hundreds of millions of dollars. This The guilty plea by OneCoin co-founder receives a week in SDNY which sends a clear message that we are going after all those who seek to fraudulently exploit the cryptocurrency ecosystem, regardless of your size or sophistication.”

According to the allegations contained in the foregoing information and other filings and statements made in court:

In 2014, GREENWOOD and IGNATOVA co-founded OneCoin,[1] A company based in Sofia, Bulgaria, allegedly marketed a cryptocurrency with the same name, which was actually a fraudulent pyramid scheme. OneCoin operates as an MLM network through which members receive commissions for recruiting others to buy cryptocurrency packages. This MLM structure affected the rapid growth of the OneCoin member network. In fact, according to OneCoin promotional materials, more than three million people have invested in fraudulent cryptocurrency packages. OneCoin records show that between the fourth quarter of 2014 and the fourth quarter of 2016 alone, OneCoin generated €4.037 billion in sales revenue and generated €2.735 billion in “profits”.

IGNATOVA served as the main lead for OneCoin until its disappearance from public view, in October 2017. GREENWOOD was the “master global distributor” of OneCoin and the leader of the network of franchises through which the fraudulent cryptocurrency was marketed and sold. In a video posted online, IGNATOVA credits GREENWOOD with the idea of ​​marketing and selling OneCoin through an MLM network structure. GREENWOOD earned close to €20 million per month in his role as the largest MLM distributor of OneCoin.

GREENWOOD and IGNATOVA conceived and built the OneCoin business entirely with the intent of using it to defraud investors. For example, in the summer of 2014, when GREENWOOD and IGNATOVA were developing the OneCoin concept, they referred to the cryptocurrency in email correspondence as a “trivial currency.” On June 11, 2014, IGNATOVA wrote to GREENWOOD regarding OneCoin’s business plan, saying in part:

It may not be [something] Really clean or I usually work on or can even be proud of (except with you one-on-one when we’re making money) – BUT. . . I’m particularly good at these very borderline situations [sic]where things get gray – and you as the magic sales machine – and me as someone who can really work with numbers and legal and support you in a good, professional way – we can really make it big – like MLM meets wall street bitch 😉

In an August 9, 2014 email between GREENWOOD and IGNATOVA, IGNATOVA described its thoughts on an “exit strategy” for OneCoin. The first option IGNATOVA listed was, “Take the money and run and blame someone else for this….” And in a September 11, 2016 exchange with IGNATOVA’s brother, Konstantin Ignatov, Greenwood referred to OneCoin investors saying, “These people are idiots,” he replied. Ignatov, “As you told me, the network won’t work for smart people ;)”

As a result of misrepresentations made by GREENWOOD, IGNATOVA, and other OneCoin representatives, victims all over the world transferred investment funds into bank accounts controlled by OneCoin in order to purchase OneCoin bundles. OneCoin wrongly claimed that the value of OneCoin was based on market supply and demand, when in reality, the value of the cryptocurrency was simply set by OneCoin itself. For example, on June 9, 2014, in an email sent by IGNATOVA to a representative of a blockchain development company, to copy GREENWOOD, IGNATOVA stated, “We are building our own cryptocurrency — and would like to create an internal exchange service for them. We would like to be able to set the price manually and automatically as well as Trading volume control. On March 21, 2015, IGNATOVA wrote an email to GREENWOOD, in which IGNATOVA stated, “We can Exchange manipulation By simulating some daily volatility and pricing.” (originally bold). On August 1, 2015, IGNATOVA wrote an email to GREENWOOD, and it was included as part of a section of the email titled “Objectives”: “6. Currency trading, stable exchange, always closing high at the end of the day open high, build trust – better manipulation so that they are happy. The alleged value of OneCoin has grown steadily from €0.50 to around €29.95 per coin. The alleged price of OneCoins has never decreased in value.

GREENWOOD and other OneCoin leaders also alleged that the OneCoin cryptocurrency was “mined” using mining servers maintained and operated by the company. In fact, OneCoins has never been mined using computer resources. For example, in an email to IGNATOVA dated August 11, 2014, GREENWOOD suggested, “Make members think they are mining their OneCoin by grinding (exchanging) OneCoin tokens. This floor [sic] Good because ppl won’t go so crazy and just try to sell tokens all the time.” GREENWOOD sent an email to IGNATOVA the next day, writing, “The concept of converting tokens into OneCoin is an important stage for the health and truth behind OneCoin. So-called “mining” coins is a very familiar concept in the industry and a story we can sell to members.” IGNATOVA then wrote to GREENWOOD, “We don’t actually mine — but tell people shit,” GREENWOOD responded, “How can this be investigated and figured out?” ?” and “Can any member (trying to be smart) figure out that we are not actually investing in machines for the sake of mining but just a piece of software doing it for us?”

GREENWOOD and other OneCoin leaders alleged that OneCoin maintained a private “blockchain,” or digital ledger that identifies OneCoins and records historical transactions. But OneCoin lacks a real blockchain i.e. a public and verifiable blockchain. In fact, by around March 2015, IGNATOVA and GREENWOOD had started allocating OneCoin members coins that didn’t even exist in OneCoin’s purported private blockchain, referring to these coins as “fake coins”.

GREENWOOD and IGNATOVA promoted OneCoin, including official OneCoin events around the world. One such event, called “Coin Rush”, was held at Wembley Arena in London on June 11, 2016. Thousands of OneCoin Coin Rush members attended. During the event, GREENWOOD introduced IGNATOVA to the audience, saying in part: “This is the creator of OneCoin, the mastermind, the founder of cryptocurrency… Now, this will be the biggest stage welcome we’ve ever done in history.” Then, to the tune of Alicia Keys’ “Girl on Fire,” and surrounded by actual fireworks on stage, IGNATOVA walked onto the Wembley Arena stage in a red gown. It proceeded to repeatedly compare its fraudulent cryptocurrency to Bitcoin, saying, among other things, “OneCoin. . . It’s supposed to be a Bitcoin killer” and “in two years, no one will be talking about Bitcoin anymore.” “

On July 4, 2015, a federal holiday commemorating the independence of the United States, IGNATOVA announced the official opening of the US market for OneCoin. In early July 2015, GREENWOOD sent an email to IGNATOVA stating in part, “I thought this might come up tonight, the problem is I don’t have access to send it to members,” and attached a document announcing a July 4, 2015, webinar hosted by IGNATOVA and others to celebrate the official opening of the US market for OneCoin. Then, on July 4, 2015, IGNATOVA participated in a webinar, later posted on YouTube.com, where IGNATOVA announced the official opening of the US market for OneCoin. During the webinar, IGNATOVA said, among others, “[I]If we want to go and pick up Bitcoin, we can’t do it without being strong in the US and without being part of the community. So, that’s why I’m so excited about the US as a market. It’s a prestige thing. It’s a huge market. And I think it’s a place to innovate, on Wall Street, a place to be if we want to go big.” Many victims in the US invested in the fraudulent OneCoin cryptocurrency packages, including residents of the Southern District of New York.

GREENWOOD was arrested at his home on the island of Koh Samui, Thailand, in July 2018, and extradited to the United States to face fraud and money laundering charges in October 2018. GREENWOOD has been in custody since his arrest in July 2018.

On October 12, 2017, IGNATOVA was indicted on charges of fraud and money laundering related to OneCoin in the United States District Court for the Southern District of New York and a federal warrant was issued for her arrest. On October 25, 2017, IGNATOVA flew on a commercial flight from Sofia, Bulgaria, to Athens, Greece, and has not been seen in public since. IGNATOVA was added to the FBI’s Ten Most Wanted List in June 2022. The FBI is offering a $100,000 reward for information leading to IGNATOVA’s arrest.

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Greenwood, 45, a citizen of Sweden and the United Kingdom, pleaded guilty to one count of conspiracy to commit wire fraud, which carries a maximum penalty of 20 years in prison, and one count of wire fraud, which carries a maximum possible sentence of 20 years in prison. and one count of conspiracy to commit money laundering, which carries a maximum penalty of 20 years in prison.

The maximum possible penalties are set by Congress and are provided here for informational purposes only, as the sentence for the defendant will be decided by a judge. Sentencing is scheduled before Judge Ramos on April 5, 2023.

Mr. Williams commended the outstanding investigative work of the Internal Revenue Service – Criminal Investigation and the FBI, which conducted this investigation jointly with special agents from the US Attorney’s Office. Mr. Williams also thanked the Royal Thai Police for their assistance in apprehending Greenwood.

If you have any information about the whereabouts of IGNATOVA, please contact your local FBI office or the nearest US embassy or consulate. Tips can be reported anonymously and can also be reported online at tips.fbi.gov.

The case is being prosecuted by the office’s Complex Fraud and Cybercrime Unit. Assistant US Attorney Christopher J. DeMacy, Nicholas Foley, and Julianna N. Murray, Kevin Meade, and Special Assistant U.S. Attorney Julieta F. Lozano of the New York District Attorney’s Office, responsible for the prosecution.