In the summer of 2018, Sebastian Greenwood was arrested at his home on Koh Samui in Thailand and a few months later he was extradited to the United States.
Since then, he has been in custody in Manhattan, New York on suspicion of a series of crimes, including fraud and money laundering, for his involvement in the fake cryptocurrency onecoin.
On Friday, the district attorney for the Southern District of New York announced that Greenwood admitted to the crimes he is charged with, somewhat Swedish daily newspaper was the first to report.
“As the founder and leader of onecoin, Karl Sebastian Greenwood ran one of the largest international frauds ever,” said prosecutor Damian Williams in a press release.
The buddy with the “crypto queen”
According to the indictment, Onecoin was founded in 2014 by Sebastian Greenwood and the Bulgarian Ruja Ignatova, who is also known as the crypto queen.
Since 2017, she has been charged in absentia and internationally wanted. This summer, she ended up on the FBI’s famous “most wanted” list of the ten most wanted criminals in the world. A $100,000 reward is being offered to anyone who can provide information leading to her arrest.
Greenwood and Ignatova launched their idea as a cryptocurrency. But it was not possible to buy the currency directly, but those who wanted to invest in onecoin had to do so by buying “training packages”. They would train people in blockchain technology, among other things, and gave the holder the right to exchange a certain number of onecoins.
The training packages themselves were sold through a pyramid scheme where people could make money by recruiting new members. At the top of the pyramid was Sebastian Greenwood, who, according to the prosecutor, earned around 20 million euros a month from it. In total, according to the prosecutor, onecoin took in around 4 billion dollars, roughly 40 million kroner, from millions of people.
Sebastian Greenwood and Ruja Ignatova traveled around the world and succeeded in recruiting scores of members. A milestone was when they managed to fill the entire Wembley Arena in London with supporters.
Manipulated the exchange rate
It was when onecoin was to expand its operations to the United States in 2015 that they began to get American authorities after them.
An investigation by the FBI has revealed email exchanges where it appears that Sebastian Greenwood and Ruja Ignatova, among other things, are discussing how to get out of onecoin. “Take the money and run, and blame everything on someone else,” is Ignatova’s suggestion. In text messages to others involved in onecoin, it has also emerged that Sebastian Greenwood called those who invest in the scheme idiots.
The investigation has also shown that onecoin, contrary to what the founders claimed, had no underlying blockchain. That is something that real cryptocurrencies always have. Instead, they could manipulate the rate of their currency as little as they wanted.
The verdict against Sebastian Greenwood is expected in April. The maximum sentence for the three counts he is charged with is 20 years each.