New confines emerge in the world of cryptocurrencies as a federal case sheds light on one of the most enduring scams. Karl Sebastian Greenwood, co-founder of OneCoin, faced a federal indictment in the United States for electronic fraud, conspiracy to commit electronic fraud, and money laundering. A Manhattan federal court confirmed that he could face a lengthy prison term for these charges. His partner, known online as ‘Cryptoreine’ Ruja Ignatova, has remained missing since 2017, and has been among the FBI’s most wanted fugitives since the start of the current year.
As described by a U.S. attorney, Greenwood led OneCoin as founder and chief strategist, directing a global fraud scheme that drew in thousands of investors. Prosecutors allege that Greenwood and Ignatova raised billions worldwide beginning in 2014 by marketing a supposed cryptocurrency that lacked an actual blockchain and value. The scheme followed a classic Ponzi-like structure, rewarding current members for recruiting new buyers of fictitious cryptocurrency packages.
Co-founder of the billion-dollar OneCoin pyramid scheme pleads guilty
— SDNY News (@SDNYnews) December 16, 2022
According to the federal prosecutor, Greenwood and his collaborators, including Ignatova who remains at large, defrauded victims of billions by promoting OneCoin as a potential breakthrough that would surpass popular digital currencies. Investigators noted that the pair earned substantial sums as global distributors of counterfeit digital currency, with monthly income reported in the millions of euros as they extended their reach across multiple jurisdictions.
Greenwood was arrested in Thailand in mid-2018 and extradited to the United States. In a statement, a U.S. official emphasized that the case sends a clear signal about enforcement actions targeting those who exploit the cryptocurrency ecosystem through fraud. The Department of Justice outlined proceedings and scheduled sentencing, underscoring the commitment to hold perpetrators accountable.
In pursuit since 2017
The Ignatova case has drawn widespread attention within cryptocurrency communities and beyond, following investigative reporting that traced the OneCoin operation. Ignatova disappeared in October 2017 after arranging a meeting with supporters in Lisbon, and she has not been located since. Records indicate she boarded a flight to Athens, and her current whereabouts remain unknown.
Over the years, authorities received numerous complaints and opened several investigations tied to OneCoin. In 2020, two cryptocurrency supporters were killed in Mazatlán, Mexico, while several associates faced money laundering convictions in Singapore and the United States. Konstantin Ignatov, Ignatova’s brother, was arrested in the United States in 2019 for assisting fraud and later cooperated with authorities in a bid to recover funds for investors. He faced substantial prison terms as part of a broader settlement related to OneCoin investors.
Speculation about Ignatova’s fate has persisted since 2017. Some believe she may have died long ago, while others suspect she remains undercover, potentially planning a future scheme. The OneCoin saga inspired renewed public fascination, prompting documentary explorations and ongoing discussions about the dynamics of cryptocurrency fraud and regulatory responses.