Judge grants extra time to alleged crypto scammers to prepare defense in fraud case

Maria Nikolova

The granted extension, however, is about a month shorter than requested by the people behind fraudulent virtual currency scheme My Big Coin Pay.

Judge Rya W. Zobel of the Massachusetts District Court has partially granted a request by the entities behind allegedly fraudulent cryptocurrency scheme My Big Coin Pay for extra time to prepare their defense in the case brought against them by the Commodity Futures Trading Commission (CFTC).

On Friday, October 12, 2018, the Judge signed an Order, stating (among other things) that expert discovery shall be completed by May 17, 2019. Let’s recall that the defendants in the case had requested an extension until June 3, 2019.

The case targets Randall Crater, his company My Big Coin Pay and a number of relief defendants. 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.

The defendants allegedly made 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.

On September 26th, Judge Rya W. Zobel denied a motion to dismiss the case, finding 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.”

This ruling supported the CFTC’s right to go after cryptocurrency scams.

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