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Co-founder of fake cryptocurrency scheme sentenced to 20 years in US prison

US district judge sentences Karl Sebastian Greenwood, a dual citizen of Sweden and the UK, who pleaded guilty to fraud and money laundering charges in December 2022.

Reuters
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Representations of cryptocurrencies are seen in this illustration, Aug 10, 2022. Photo: Reuters
Representations of cryptocurrencies are seen in this illustration, Aug 10, 2022. Photo: Reuters

A federal judge in New York sentenced the co-founder of the purported cryptocurrency OneCoin to 20 years in prison on Tuesday for what prosecutors called a US$4 billion (about RM18.7 billion) fraud.

US district judge Edgardo Ramos in Manhattan sentenced Karl Sebastian Greenwood, a dual citizen of Sweden and the UK, who pleaded guilty to fraud and money laundering charges in December 2022.

Ramos also ordered Greenwood to forfeit US$300 million.

Greenwood has been detained in New York since his 2018 arrest in Thailand and extradition to the US over his role in promoting OneCoin.

Prosecutors had sought a sentence of at least 30 years for Greenwood, who they said was OneCoin's "primary promoter" who touted it as the next Bitcoin. In reality, OneCoin was a pyramid scheme that defrauded at least 3.5 million people, they said.

Greenwood's attorneys had asked for a sentence of time served, citing harsh conditions during his detention.

Greenwood founded OneCoin in Sofia, Bulgaria in 2014 alongside Ruja Ignatova, a German citizen who prosecutors say is also known as the "Cryptoqueen". The FBI named her to its top ten most-wanted list last year.

Ignatova remains at large, prosecutors said.

An attorney for Greenwood declined to comment.

The sentence comes as prosecutors in Manhattan gear up for the trial of FTX founder Sam Bankman-Fried, who has pleaded not guilty to fraud and conspiracy charges stemming from the November 2022 collapse of his now-bankrupt cryptocurrency exchange.