CFTC argues My Big Coin Pay’s efforts to dismiss case are doomed
The regulator says the case against the alleged cryptocurrency fraudsters is not a complicated one and that they should stop piling up motions before the court.
The United States Commodity Futures Trading Commission (CFTC) has sought to nix efforts by alleged cryptocurrency fraudsters My Big Coin Pay, Inc., My Big Coin, Inc., Randall Crater, Mark Gillespie, John Roche, and Michael Kruger, to pile up more information before the Court, as the US regulator continues to face objections with regard to its powers to oversee the virtual currency segment and take action against crypto scammers.
On Tuesday, May 29, 2018, the CFTC filed its objection with the Massachusetts District Court, saying that the defendants’ requests to file more pages of information, as they seek to dismiss the action, must not be granted. Basically, the defendants continue to insist that My Big Coin, the virtual currency they promoted, is not a commodity under the Commodity Exchange Act. They keep filing motions arguing that the case should be dismissed based on this argument. The CFTC, however, refers to a Court ruling in a similar case, where the Judge found that virtual currencies are commodities.
According to the CFTC, My Big Coin Pay and the people behind it are recognizing that their Motion to Dismiss is doomed, so they are now asking the Court to bend the Local Rules. The regulator says that the defendants’ request for a second bite at the apple should be denied as unnecessary and prejudicial.
This is not a complicated case, the CFTC argues, as My Big Coin (“MBC”), is a “commodity” under Section 1a(9) of the Commodity Exchange Act. The definition of “commodity” includes the category “all other goods and articles”.
Let’s recall that, under the allegations, since at least January 2014, the defendants have engaged in a fraudulent virtual currency scheme in which they solicited customers to purchase a fully-functioning virtual currency, MBC, by repeatedly making false and misleading claims about MBC’s value, usage, trade status, and financial backing.
Defendants’ fraudulent scheme involved My Big Coin, a virtual currency whose name sounds like Bitcoin, a functionally similar and well-known virtual currency. The defendants pitched their virtual currency as a particular item that was separately identifiable, unique, and moveable from one wallet or owner to another and represented that each individual MBC could be bought, sold, donated, and used to buy products worldwide. These representations, however, were false.
Defendants’ fraud involved making material misrepresentations and omissions to customers about MBC via email, websites, YouTube, press releases, social media, and in person. For instance, the defendants lied that MBC was backed by millions of dollars in gold, and would be used to stabilize the economies of 22 countries, giving the illusion that MBC was a safe bet.