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December 23, 2022 Bitcoin.com

$4B OneCoin scam co-founder pleads guilty, faces 60 years jail

December 19, 2022 Coin Telegraph

Coin Telegraph

The co-founder of the fraudulent scheme is set to be sentenced in April 2023 on charges relating to wire fraud and money laundering.

Karl Sebastian Greenwood, the co-founder of the multi-billion dollar fraudulent cryptocurrency scheme OneCoin has pleaded guilty to multiple charges brought forward by the United States Department of Justice (DOJ) and faces a maximum of 60 years in prison.

The DOJ announced on Dec. 16 that Greenwood submitted a guilty plea in a Manhattan federal court to charges of wire fraud, wire fraud conspiracy and money laundering conspiracy with each charge carrying a maximum potential sentence of 20 years in jail.

U.S. Attorney Damian Williams said Greenwood operated “one of the largest international fraud schemes ever perpetrated” and claimed he touted OneCoin as a “Bitcoin killer” when in reality the tokens were “entirely worthless.”

OneCoin was a Bulgarian company founded by Greenwood alongside “Cryptoqueen” Ruja Ignatova that marketed a cryptocurrency by the same name. Emails obtained by the DOJ between the two before its founding in 2014 allege the pair called it a “trashy coin.”

*Greenwood on stage in Jun. 2016 at OneCoin’s “COIN RUSH” event in London. Image:* *YouTube*

Outwardly it claimed to be a multi-level marketing firm with members gaining commissions for selling cryptocurrency packages apparently containing OneCoin and the ability to mine more. OneCoin could only be exchanged for fiat currency on the private Xcoinx exchange.

In reality, it was both a pyramid and a Ponzi scheme as investors could recruit others into the scheme without an actual product and later investors were paid with the money from earlier investors.

According to the DOJ Greenwood was earning around $21.2 million (€20 million) per month in his role as the “global master distributor” of the fraudulent crypto firm. Over $4 billion is believed to have been swindled by OneCoin from the three million people who invested in the packages.

Ignatova was placed on the Federal Bureau of Investigation’s top ten most wanted list in June for her role in the scheme. She remains at large and was last known to have traveled to Athens, Greece in Oct. 2017.

Williams said Greenwood’s plea “sends a clear message” the DOJ is “coming after all those who seek to exploit the cryptocurrency ecosystem through fraud, no matter how big or sophisticated you are.”

Greenwood is slated to be sentenced before District Judge Edgardo Ramos on Apr. 5, 2023.

Authorities elsewhere have charged those involved with OneCoin and Ignatova, with three associates facing charges in Germany over fraud and money laundering.

Charges laid over alleged ‘crypto mining’ Ponzis that netted $8.4M

December 16, 2022 Coin Telegraph

Charges laid over alleged ‘crypto mining’ Ponzis that netted .4M

Coin Telegraph

Various creators and promotors of two allegedly fraudulent crypto companies are facing a litany of charges that could land them 20 years in jail.

United States prosecutors have laid charges in two separate cases against nine people who founded or promoted a pair of cryptocurrency companies alleged to be Ponzi schemes that netted $8.4 million from investors.

On Dec. 14 the U.S. Attorney’s Office for the Southern District of New York unsealed the indictment, alleging the purported crypto mining and trading companies IcomTech and Forcount promised investors “guaranteed daily returns” that could double their investment in six months.

In reality, prosecutors say both firms were using the money from later investors to pay earlier investors, while other funds were spent on promoting the companies and buying luxury items and real estate.

“Lavish expos” were held in the U.S. and abroad, along with presentations in small communities, that lured investors in with promises of financial freedom and wealth.

Promotors would allegedly show up at events in expensive cars, wearing luxury clothing and would boast about the money they were making from investing in the company they were promoting. Investors were given access to a “portal” to monitor their returns

IcomTech and Forcount started to fall apart when users were unable to withdraw their purported returns.

Charges brought against Forcount’s creators and promotors by the Securities and Exchange Commission (SEC) allege the outfit targeted primarily Spanish speakers and gathered over $8.4 million from “hundreds” of investors selling “memberships” offering a cut of its crypto trading and mining activities.

In an attempt to spin up liquidity both companies created tokens so they could try repay investors with IcomTech and Forcount launching “Icoms” and “Mindexcoin” respectively.

Seemingly the token sales failed as by 2021 both had stopped making payments to investors.

“With these two indictments, this Office is sending a message to all cryptocurrency scammers: We are coming for you,” said U.S. Attorney Damian Williams. "Stealing is stealing, even when dressed up in the jargon of cryptocurrency.”

David Carmona of Queens, New York was named in the indictment as the founder of IcomTech, and was charged with conspiracy to commit wire fraud that carries a maximum penalty of 20 years prison.

Forcount’s founder was named as Francisley da Silva, from Curitiba, Brazil and faces charges of wire fraud, wire fraud conspiracy and money laundering conspiracy which carries a maximum of 60 years in prison if convicted of all charges.

The promotors for the firms face various charges relating to wire fraud, wire fraud and money laundering conspiracy and making false statements.

US Seizes Domains Used in ‘Pig Butchering’ Crypto Scam

November 24, 2022 Bitcoin.com

Sam Bankman-Fried deepfake attempts to scam investors impacted by FTX

November 22, 2022 Coin Telegraph

Coin Telegraph

A faked video the FTX founder created by scammers has circulated on Twitter with users poking fun at its poor production quality.

A faked video of Sam Bankman-Fried, the former CEO of cryptocurrency exchange FTX, has circulated on Twitter attempting to scam investors affected by the exchange’s bankruptcy.

Created using programs to emulate Bankman-Fried’s likeness and voice, the poorly made “deepfake” video attempts to direct users to a malicious site under the promise of a “giveaway” that will “double your cryptocurrency.”

Over the weekend, a verified account posing as FTX founder SBF posted dozens of copies of this deepfake video offering FTX users "compensation for the loss" in a phishing scam designed to drain their crypto wallets pic.twitter.com/3KoAPRJsya
— Jason Koebler (@jason_koebler) November 21, 2022

The video uses appears to be old interview footage of Bankman-Fried and used a voice emulator to create the illusion of him saying “as you know our F-DEX [sic] exchange is going bankrupt, but I hasten to inform all users that you should not panic.”

The fake Bankman-Fried then directs users to a website saying FTX has “prepared a giveaway for you in which you can double your cryptocurrency” in an apparent "double-your-crypto" scam where users send crypto under the promise they'll receive double back.

A now-suspended Twitter account with the handle “S4GE_ETH” is understood to have been compromised, leading to scammers posting a link to the scam website — which now appears to have been taken offline.

The crypto community has pointed to the fact that scammers were able to pay a small fee in order to get Twitter’s “blue tick” verification in order to appear authentic.

Meanwhile, the video received widespread mockery for its poor production quality with one Twitter user ridiculing how the scam production pronounced “FTX” in the video, saying they’re “definitely using [...] ‘Effed-X’ from now on.”

At the same time, it gave many the opportunity to criticize the FTX founder, one user said “fake [Bankman-Fried] at least admits FTX is bankrupt” and YouTuber Stephen Findeisen shared the video saying he “can’t tell who lies more” between the real and fake Bankman-Fried.

Authorities in Singapore on Nov. 19 warned affected FTX users and investors to be vigilant as websites offering services promising to assist in recovering crypto stuck on the exchange are scams that mostly steal information such as account logins.

The Singapore Police Force warned of such a website which prompted FTX users to log in with their account credentials that claimed to be hosted by the United States Department of Justice.

Others have attempted to profit from the attention FTX and its former CEO are receiving. On Nov. 14, shortly after Bankman-Fried tweeted “What” without further explanation, some noticed the launch of a so-called “meme token” called WHAT.

Somebody just launched a $WHAT token and it’s done a 4x.

It’s over. pic.twitter.com/VB2UtENSGH
— Tyler (@ApeDurden) November 14, 2022

“Deepfake” videos have long been used by cryptocurrency scammers to try to con unwitting investors. In May, faked videos of Elon Musk promoting a crypto platform surfaced on Twitter using footage from a TED Talk the month prior.

The video caught Musk’s attention at the time, who responded: “Yikes. Def not me.”

Cryptoqueen Ruja Ignatova Tipped Off About Onecoin Investigations Before She Vanished, Report

October 22, 2022 Bitcoin.com

US State Issues Order Freezing Crypto at Exchanges in Pig Butchering Scam Crackdown

October 1, 2022 Bitcoin.com

‘Far too easy’ — Crypto researcher’s fake Ponzi raises $100K in hours

September 6, 2022 Coin Telegraph

‘Far too easy’ — Crypto researcher’s fake Ponzi raises 0K in hours

@fatmanterra

Crypto Twitter user FatManTerra explained the fake investment scheme was used to teach people a lesson about investing blindly in crypto schemes shilled by influencers.

Crypto influencer FatManTerra claims to have gathered over $100,000 worth of Bitcoin (BTC) from crypto investors in an investment scheme that was later revealed as fake.

The crypto researcher said he created the fake investment scheme as an experiment and to teach people a lesson about blindly following the investment advice of influencers.

The account on Twitter has around 101,100 followers and is mostly known for being a former Terra proponent that now actively speaks out against the project and founder Do Kwon following its $40 billion collapse in May.

In a Sept. 5 tweet, FatManTerra told his followers he had “received access to a high-yield BTC farm” by an unnamed fund, and said that people could message him if they wanted-in on the yield farming opportunity.

“I've maxed out what I could, so there's some leftover allocation and I thought I'd pass it along — priority will be given to UST victims. DM for more details if interested,” he wrote.

While the post received a ton of negative responses from people calling it out as a scam, FatMan said he still managed to raise more than $100,000 worth of BTC from the initial post on Twitter and on Discord within a span of two hours.

In a Sept. 6 tweet, FatManTerra revealed the investment scheme was fake all along, describing it as an “awareness campaign” to show how easy it is to dupe people in crypto by using simple buzzwords and promising big investment returns.

“While I used plenty of buzzwords and put on a very convincing act on all platforms, I made sure to keep the investment details intentionally obscure — I didn't name the fund & I didn't describe the trade — no one knew where the yield was coming from. But people still invested.”

“I want to send a clear, strong message to everyone in the crypto world — anyone offering to hand you free money is lying. It simply doesn't exist. Your favorite influencer selling you quick money trading coaching or offering a golden investment opportunity is scamming you,” he added.

It is far too easy to scam people in crypto.

And this needs to change.

If you don't understand where the yield is coming from, you are the yield.

Listen carefully to the vocal critics of any project or investment before getting involved. *Really* listen.
— FatMan (@FatManTerra) September 5, 2022

FatManTerra claims to have now refunded all of the money and reiterated that “free lunches don’t exist.”

The notion of influencers allegedly promoting scams has been in the news of late, with YouTuber Ben Armstrong (BitBoy Crypto) taking legal action against content creator Atozy last month for accusing him of promoting dubious tokens to his audiences, although he has since withdrawn the lawsuit.

FatManTerra also stated that his fake fund post was inspired by the Lady of Crypto Twitter account which has been accused of shilling questionable investment schemes to its 257,500 followers.

On Sept. 5, the Lady of Crypto opened up a whitelist for their new funded trading firm that touts it can trade users' funds on their behalf and receive an 80/20 split on the profits.

crypto scam