Founder of cryptocurrency scheme My Big Coin Pay gets arrested and charged with fraud
Randall Crater was charged with four counts of wire fraud and three counts of unlawful monetary transactions.
Randall Crater, the founder and principal operator of cryptocurrency scheme My Big Coin Pay Inc, was charged in an indictment unsealed today for his alleged participation in a scheme to defraud investors by marketing and selling fraudulent virtual currency.
Crater, of East Hampton, New York, was charged in an indictment filed in the District of Massachusetts with four counts of wire fraud and three counts of unlawful monetary transactions. He was arrested this morning and is set to appear today in U.S. District Court in the Middle District of Florida.
The indictment alleges that between 2014 and 2017, Crater and others created the fraudulent virtual currency “My Big Coins” or “Coins” and marketed this fraudulent currency to investors using misrepresentations about its nature and value. Crater and his associates are said to have falsely claimed that Coins were a fully functioning cryptocurrency backed by valuable assets such as gold. Crater and his associates also allegedly told investors that Coins could be readily exchanged for goods, cash or other virtual currencies. In reality, Coins were not backed by gold or any other valuable assets and were not readily transferable.
Crater is said to have misappropriated more than $6 million in investor funds for personal use, including to purchase artwork, antiques, jewelry and other luxury items.
Let’s recall that, in a landmark ruling issued in September 2018, Judge Rya W. Zobel of the Massachusetts District Court nixed a motion to dismiss a case brought by the Commodity Futures Trading Commission (CFTC) against Crater, My Big Coin Pay and a number of relief defendants.
The Judge ruled that virtual currencies are commodities under the CEA. Commodity is a defined term in the CEA, the Judge noted. It includes a host 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.” Hence, the CFTC has the right to take enforcement action against virtual currency fraudsters.
