Bogus ‘Bitcoin killer’ cryptocurrency founder pleads guilty

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NEW YORK (AP) A co-founder of fraudulent cryptocurrency OneCoin, a pyramid scheme that defrauded investors around the world out of billions of dollars, has pleaded guilty to charges of wire fraud and money laundering, U.S. prosecutors announced Friday.

Touted as a bitcoin killer, prosecutors said the alleged cryptocurrency co-founded by Ruja Ignatova and Karl Sebastian Greenwood in 2014 in Bulgaria was in fact worthless. Although marketed as a cryptocurrency, it was never mined using computers and there was no public, verifiable blockchain. OneCoin’s value was not set by supply and demand, but by its operators, they said.

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

Greenwood, a Swedish and British citizen, has been detained since his arrest.

US attorney Damian Williams says Greenwood helped exploit one of the biggest international fraud schemes of all time. His office said the victims had invested more than $4 billion.

Greenwood’s lies were crafted for one purpose, to get ordinary people around the world to part with their hard-earned money and line their pockets to the tune of hundreds of millions of dollars, Williams said in a statement.

Ignatova, nicknamed the Cryptoqueen and described as the leader of OneCoins, disappeared in October 2017 and is still at large. In June, she was added to the FBI’s Ten Most Wanted list and there is a $100,000 reward for information leading to her arrest.

The growth of OneCoins was fueled by multi-level marketing, in which members received commissions for recruiting others to buy cryptocurrency packages.

Although Ignatova bragged that OneCoin would be the killer of Bitcoin, she and Greenwood called it a trash coin in email correspondence. In an email, Greenwood called the investors idiots.

He will be sentenced on April 5.

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