Alleged crypto fraudsters insist My Big Coin is not “commodity”

Maria Nikolova

In the face of a Court ruling that My Big Coin is a virtual currency, and hence, a commodity under the CEA, Randall Crater insists on the opposite.

Less than two months after Judge Rya W. Zobel of the Massachusetts District Court nixed a motion to dismiss a case targeting Randall Crater, his company My Big Coin Pay and a number of other entities associated with this cryptocurrency scheme, the defendants have filed their answers to the complaint by the Commodity Futures Trading Commission (CFTC). The opposition can be summarized as: whereas Bitcoin is a commodity, My Big Coin is different from Bitcoin, and, hence, is not a commodity.

The defendants’ arguments run counter Judge Zobel’s findings. The Judge ruled in September this year that virtual currencies are commodities under the CEA.

Commodity is a defined term in the CEA, the Judge noted. It includes a raft of specifically enumerated agricultural products as well as “all other goods and articles … and all services rights and interests … in which contracts for future delivery are presently or in the future dealt in.”

The defendants contend that because “contracts for future delivery” are indisputably not “dealt in” My Big Coin, it cannot be a commodity under the CEA. The CFTC responds that a ‘commodity’ for purposes of the CEA definition is broader than any particular type or brand of that commodity. Pointing to the existence of Bitcoin futures contracts, the regulator argues that contracts for future delivery of virtual currencies are “dealt in” and that My Big Coin, as a virtual currency, is therefore a commodity.

The text of the statute supports the CFTC’s argument, the Judge said back in September.

“Here, the amended complaint alleges that My Big Coin is a virtual currency and it is undisputed that there is futures trading in virtual currencies (specifically involving Bitcoin). That is sufficient, especially at the pleading stage, for plaintiff to allege that My Big Coin is a “commodity” under the Act”, the Judge said.

In the most recent Court filings, the defendants disregard the Court’s arguments. Randall Crater simply reiterates that he denies that the My Big Coin currency is a “commodity”. He claims that “My Big Coin is not sufficiently related to Bitcoin, the only virtual currency on which futures contracts are traded, to conclude that My Big Coin is a good, article, service, right or interest on which contracts for future delivery are dealt in, and, therefore, My Big Coin is not a “commodity” as defined in the Commodity Exchange Act”.

Thus, he argues, the Court should dismiss the CFTC Complaint with prejudice.

Let’s recall that the amended CFTC complaint alleges a fraudulent virtual currency scheme in violation of the Commodity Exchange Act (CEA). According to the CFTC allegations, Crater and the other defendants operated a virtual currency scheme in which they fraudulently offered the sale of a fully-functioning virtual currency called “My Big Coin”. In summary, the defendants enticed customers to buy My Big Coin by making various untrue and/or misleading statements and omitting material facts. The falsities included that My Big Coin was “backed by gold,” could be used anywhere Mastercard was accepted, and was being “actively traded” on several currency exchanges.

The defendants also made up and arbitrarily changed the price of My Big Coin to mimic the fluctuations of a legitimate, actively-traded virtual currency. When victims of the fraud purchased My Big Coin, they could view their accounts on a website but “could not trade their MBC or withdraw funds”. The defendants obtained more than $6 million from the scheme.

The case is captioned Commodity Futures Trading Commission v. My Big Coin Pay, Inc. et al (1:18-cv-10077).

Read this next

Digital Assets

BlockDAG’s Presale Achieves $9.9M: Aiming For A 5000-Fold ROI As Cardano’s Price Rises And Fantom Launches Sonic

Explore Cardano’s surge, Sonic’s efficiency, and why BlockDAG’s growth makes it the top crypto choice. A deep dive into the future of blockchain investments.

Digital Assets

US, UK probe $20 billion Tether transfers tied to Russian exchange.

U.S. and UK authorities are investigating the movement of $20 billion in the USD-pegged stablecoin tether (USDT) through Moscow-based exchange Garantex.

Digital Assets

BlockDAG Presale Raises $9.9M as Batch 5 Nears Sell-Out Amid Bonk’s Fluctuating Trading Volume & Spell’s Bullish Price

Explore BONK’s trading volume, SPELL’s market shifts, and why BlockDAG’s 10,000 ROI makes it an ideal crypto for savvy investors in 2024.

Digital Assets

Bybit expands into Europe amid regulatory scrutiny

Dubai-based cryptocurrency exchange Bybit is expanding its operations in Europe after encountering regulatory challenges in Hong Kong.

Digital Assets

Cathie Wood’s sponsored Bitcoin ETF sees historic $200 million inflows

The ARK 21Shares Bitcoin ETF (ARKB), co-sponsored by Cathie Wood’s ARK Invest, registered historic inflows exceeding $200 million on Wednesday, signaling a robust appetite among investors for Bitcoin-centric investments.

Digital Assets

Sam Bankman-Fried might see his 25-year sentence halved

Sam Bankman-Fried, the founder of the failed cryptocurrency exchange FTX, was sentenced to 25 years in federal prison by a Manhattan court on Thursday. This comes after he was convicted of defrauding customers and investors, with Judge Lewis Kaplan highlighting the potential future risks posed by Bankman-Fried.

Technical Analysis

EURJPY Technical Analysis Report 28 March, 2024

EURJPY currency pair under the bearish pressure after the pair reversed down from the major resistance level 164.25, which also stopped the sharp weekly uptrend at the end of last year,

Digital Assets

BlockDAG’s Presale Hits $9.9M, MultiversX & MINA Price Predictions Show Green

Read about BlockDAG’s promising $10 prediction and insights on MultiversX Price Prediction as MINA’s potential unfolds.

Digital Assets

Rockstar Co-Founder and All-star Line Up Join Advisory Board to Take Metacade into Post Beta Orbit

Metacade, the revolutionary Web3 gaming platform, prepares to streak out of beta with a slew of ground-breaking initiatives that will redefine the way blockchain games are developed.

<