A federal jury has convicted the founder of “My Big Coin” in a fraudulent scheme that swindled $6 million from cryptocurrency investors. The defendant made several false claims, including that the coins were backed by gold and that the company had a partnership with Mastercard.
The U.S. Department of Justice (DOJ) announced Thursday that the founder of My Big Coin Pay Inc. (aka My Big Coin), Randall Crater, has been convicted in a cryptocurrency fraud scheme. The 51-year-old from East Hampton, New York, defrauded investors of over $6 million, the DOJ alleged.
Crater has been “convicted of four counts of wire fraud, three counts of unlawful monetary transactions, and one count of operating an unlicensed money transmitting business,” the Justice Department detailed.
Eric Shen, the inspector in charge of the U.S. Postal Inspection Service’s Criminal Investigations Group who worked on the case, commented:
The defendant preyed on victims with what appeared to be an unstoppable rise in cryptocurrency values, when in reality investors were only funding his lavish lifestyle.
The defendant spent the fraudulently obtained funds on “luxury items for himself, including artwork, antiques, and jewelry,” the DOJ said.
My Big Coin was marketed to crypto investors between 2014 and 2017. “Crater and his associates falsely claimed that [the] coins were a fully functioning cryptocurrency backed by $300 million in gold, oil and other valuable assets.” They further claimed that “My Big Coin has a partnership with Mastercard and that [the] coins could readily be exchanged for government-backed paper currency or other virtual currencies.” However, the Justice Department emphasized:
In reality, [the] coins were not backed by gold or other valuable assets, did not have a partnership with Mastercard and were not readily transferable.
In addition, the Commodity Futures Trading Commission (CFTC) filed charges against Crater and My Big Coin in January 2018.
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