- The coins were not secured by gold or even other valuable assets as claimed.
- CFTC also brought allegations against Crater and My Big Coin in 2018.
It was stated on Thursday that My Big Coin Pay Inc. founder Randall Crater had been found guilty of crypto fraud by the United States Department of Justice (DOJ). The Department of Justice (DOJ) claims that the 51-year-old East Hampton, New York man scammed investors out of more than $6 million.
When it comes to wire fraud, there were four charges, three for money laundering, and one for running a money transmitting company without a license, as the Justice Department said.
Eric Shen, the inspector in charge of the U.S. Postal Service’s Criminal Investigations Group, said:
“The defendant preyed on victims with what appeared to be an unstoppable rise in cryptocurrency values, when in reality investors were only funding his lavish lifestyle.”
Fraudulent Claims Lured Investors
According to the DOJ, the defendant bought “luxury things for himself, including artwork, antiques, and jewelry,” using the money he gained via deception. Between 2014 and 2017, “Crater and his associates falsely claimed that [the] coins were a fully functioning cryptocurrency backed by $300 million in gold, oil and other valuable assets.”
In addition, they stated that My Big Coin has a connection with Mastercard and that the coins could quickly be traded for government-backed paper cash or other virtual currencies.
However, the coins were not secured by gold or even other valuable assets, nor did they have any relationship with Mastercard, and weren’t easily transferrable, according to the Justice Department. In January 2018, the Commodity Futures Trading Commission (CFTC) also brought allegations against Crater and My Big Coin.
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