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

December 19, 2022 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.

Onecoin Co-Founder Pleads Guilty to Fraud Charges in US

December 18, 2022 Bitcoin.com

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.

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Trouble in the Bahamas following FTX collapse: Report

November 25, 2022 Coin Telegraph

Coin Telegraph

The locals say they are having to contend with vacant apartments and the loss of job opportunities, once provided by the collapsed exchange.

Following the collapse of crypto exchange FTX, which was headquartered in the island nation of Bahamas, Bahamians are reportedly still trying to find a way to make sense of everything, while remaining optimistic about the future.

According to a report by the WSJ, the island nation — which encouraged cryptocurrency companies to feel at home with their “copacetic regulatory touch” — has been rocked by the implosion of FTX.

The Bahamas, which was also hard hit by hurricane Dorian in 2019 and the pandemic shortly afterward in 2020, was already struggling to find ways to strengthen its economy which relies heavily on tourism and offshore banking for a bulk of its GDP. It appeared that the prime minister of the Bahamas, Philip Davis, and his government believed crypto could play a critical role in the island’s economic recovery.

Now, the community suggests that FTX’s sudden implosion has left a trail of unemployment on the tiny 80-square-mile island. While functioning at full capacity, FTX provided employment for locals, as it reportedly spent over “$100,000 a week on catering” and also set up a private shuttle service to transport workers around the island. FTX also hired a number of local Bahamians in areas such as logistics, events planning, and regulatory compliance, according to the WSJ.

With the collapse of FTX, many high-spending foreigners who worked for the company and once boosted the local economy have reportedly fled the island, leaving Bahamanian security guards to now guard “nearly vacant buildings."

In the aftermath of the fall of FTX, some crypto community members have said they feel no sympathy for the effects of the collapse of FTX on the tiny island nation.

A contributor on the Hacker news with the username matkoniecz commented; “Given that Bahamas help rich people and companies to evade taxes, my sympathy to negative consequences of that are limited.”

Another user going by the handle Exendroinient00 shared, “Nothing wrong with inviting every scammer to do scamming on your islands,” in reference to the island's laws, which seem to incentivize offshore banking activities on its island.

On Oct. 18, Cointelegraph reported that the Bahamian securities regulator ordered the transfer of FTX’s digital assets to a wallet owned by the commission “for safekeeping.”

According to a statement by the Royal Bahamas Police Force sent to Reuters on Nov 13, an investigation of possible criminal misconduct over the insolvency of FTX is underway by financial investigators and the Bahamas securities regulators.

Ponzi scheme