In a landmark decision, the U.S. Department of Justice (DOJ) secured Randall Crater’s conviction for defrauding victims of over $7.5 million in a fake virtual currency scheme.
The conviction makes Crater the first digital asset founder convicted by a federal jury, with the court sentencing him to a 100-month prison term with an additional three years of supervised release. Crater, the founder of the sham My Big Coin project, was found guilty of multiple counts of wire fraud and operating an unregistered money-transmitting business.
According to court documents, the 52-year-old began his illicit scheme in 2013, convincing unsuspecting individuals to invest in My Big Coin. Crater misled investors by claiming that they would earn hefty profits on their investments and that his project was backed by gold and had a partnership with Mastercard (NASDAQ: M.A.).
Crater also misrepresented to victims that he operated a My Big Coin exchange where tokens could be traded for fiat or other virtual currencies. The scheme went bust following the Commodity Futures Trading Commission’s (CFTC) charges against Crater and his associates.
“His lies and deception inflicted real trauma, pain, and hardship on the lives of 55 individual victims and their families who funneled their money into bank accounts Mr. Crater controlled and used to finance his extravagant lifestyle,” said U.S. Attorney Rachael Rollins.
“I hope today’s sentence sends a strong message that fraudsters—in any market—who seek to exploit others will be found and brought to justice,” Rollins added.
Investigators confirm that Crater used the funds from his illicit scheme to purchase luxury cars, a house, jewelry, and artwork worth over $1 million. He was slammed with an order to pay the sum of $7.6 million as forfeiture while an amount for restitution is scheduled to be announced at a later date.
Dark days ahead for virtual currency fraudsters
Law enforcement agencies have received a string of sentences against virtual currency bad actors worldwide in 2022. The convictions are part of a renewed commitment to sanitize the burgeoning ecosystem and to protect investors from losses.
The increase of the U.S. Securities and Exchange Commission’s (SEC) team on virtual currencies and the creation of the National Cryptocurrency Enforcement Team (NCET) has signaled heightened enforcement action in the ecosystem.
On a global scale, Interpol is working with national police departments to apprehend fugitives like Terraform Labs founder Do Kwon and OneCoin’s Ruja Ignatova while extradition processes are underway in several jurisdictions.
Watch: Law & Order: Regulatory Compliance for Blockchain & Digital Assets
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