Business 28 February 2019

Erik Gibbs

My Big Coin founder arrested, charged with fraud

Last year, the founder of My Big Coin and the cryptocurrency MBC, Randall Crater, unsuccessfully argued in court that digital currencies are not commodities. That case involved the U.S. Commodity Futures Trading Commission (CFTC) and, since crypto isn’t a commodity according to Crater, the CFTC could not regulate how he ran his business. When the court disagreed, it established a precedent for digital assets that has now led to Crater being arrested and charged with fraud. 

According to an indictment unsealed on Wednesday, Crater is being charged with four counts of wire fraud and three counts of unlawful monetary transactions. He was arrested on Wednesday morning and will now appear before a judge with the U.S. District Court in the Middle District of Florida. 

The indictment claims that the New York resident, along with others, created and managed MBC from 2014 to 2017. It has been deemed as a fraudulent digital currency and Crater has been accused of routinely misleading representatives about its value, the nature of the coin and how the company planned on using the investments it received. Crater and his partners asserted that MBC was backed by tangible assets, such as gold, and that investors could exchange their coins for cash, merchandise and even other digital currencies. However, MBC had no physical backing and the coins were not easily transferable to other assets. 

The indictment explains, “As alleged in the indictment, Crater and his associates solicited investors and distributed these misrepresentations through websites and social media affiliated with My Big Coin, as well as by direct communications with investors and prospective investors. In reality, Coins were not backed by gold or any other valuable assets and were not readily transferable, the indictment alleges.“

Following an investigation by the U.S. Postal Inspection Service and the FBI, with assistance from the CFTC, Crater was determined to have absconded with over $6 million of the investment money taken in by the company. That money, according to the indictment, was sued to purchase high-priced works of art, jewelry, antiques and other luxury goods. 

The possible sentence that could be imposed against Crater was not defined; however, wire fraud charges can carry sentences of up to 30 years in prison and Crater is facing four. “Unlawful monetary transactions,” which could include money laundering, carry substantial fines and prison time of a minimum of one year and as high as 35 years, depending on the nature of the activity.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

Bitcoin Satoshi Vision (BSV) is today the only Bitcoin project that follows the original Satoshi Nakamoto whitepaper, and that follows the original Satoshi protocol and design. BSV is the only public blockchain that maintains the original vision for Bitcoin and will massively scale to become the world’s new money and enterprise blockchain.

COMMENT

latest news

Japan to strengthen crypto AML and KYC laws and look hard at exchanges

Business 5 hours ago

Japan to strengthen crypto AML and KYC laws and look hard at exchanges

Japan doesn’t want to be embarrassed by lax crypto laws again, and they will set a new example for the world to follow.

Read More
US Presidential Hopeful Eric Swalwell accepting Bitcoin SV donations

Business 7 hours ago

US Presidential Hopeful Eric Swalwell accepting Bitcoin SV donations

He’s not a big contender yet, but Eric Swalwell is hoping that a few BSV donations might get him in the conversation as a Presidential hopeful.

Read More
Cobinhood exchanges reportedly goes bust–or not

Business 7 hours ago

Cobinhood exchanges reportedly goes bust–or not

Cobinhood has reportedly gone under, succumbing to the issues that plagued a number of companies during the prolonged crypto winter.

Read More
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]
[data-clipboard-demo]