DOJ secures stay of CFTC case against cryptocurrency scheme My Big Coin Pay

Maria Nikolova

The Department of Justice secured a stay of the discovery in the civil case pending resolution of a federal criminal case based on the same alleged misconduct.

Judge Rya W. Zobel of the Massachusetts District Court has granted a motion by the United States Department of Justice to intervene and stay the discovery in the civil case against My Big Coin Pay, Inc., Randall Crater, Mark Gillespie, and a number of relief defendants.

The Department of Justice has moved to intervene in this action for the limited purpose of moving for a stay of discovery pending resolution of a federal criminal case based on the same alleged misconduct.

Let’s recall that, in January 2018, the CFTC initiated a civil action against My Big Coin Pay, Inc., Randall Crater, Mark Gillespie, and relief defendants Kimberly Renee Benge, Kimberly Renee Benge d/b/a Greyshore Advertisement, Barbara Crater Meeks, Erica Crater, Greyshore, LLC, Greyshore Technology, LLC. On April 20, 2018, the CFTC filed an amended complaint, naming John Roche and Michael Kruger as additional defendants.

On February 26, 2019, a grand jury sitting in the District of Massachusetts returned a seven-count Indictment charging Crater with wire fraud and unlawful monetary transactions. The Criminal Action and the CFTC Action are founded on the same operative facts, the DOJ says. Any resolution of the Criminal Action, which is premised on the same nexus of facts as the CFTC Action, will significantly affect the result of the civil action. At a minimum, according to the DOJ, resolving the Criminal Action will greatly simplify the issues to be resolved in the CFTC case.

As set forth in the Indictment, Crater is charged with engaging in a scheme to defraud investors by soliciting investments in a proprietary virtual currency called “My Big Coins” or “Coins.” Between 2014 and 2017, Crater and his affiliates persuaded investors to purchase or invest in Coins by making numerous misrepresentations about Coins. Among other things, Crater and his affiliates falsely claimed that Coins were a functioning virtual currency with value, were backed by gold, and could be traded on exchanges. In reality, the Indictment alleges, Coins were not backed by gold or other assets, were not readily exchangeable virtual currency, and had little to no actual value. Over the course of the scheme, Crater misappropriated over $6 million in investor funds. Crater was indicted on February 26, 2019.

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