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The founder of a Nevada-based company was arrested Wednesday on federal charges. He participated in a $ 6 million scheme to defraud people who wanted to buy a virtual currency called My Big Coin, which he said was backed by gold.
FILE PHOTO: Ripple, Bitcoin, Etherum and Litecoin virtual currency images are visible on a PC motherboard in this illustration, February 13, 2018. REUTERS / Dado Ruvic / Illustration / Photo File
BOSTON: The founder of a Nevada-based company was arrested Wednesday for federal reasons. He participated in a $ 6 million scheme to defraud people who wanted to buy a virtual currency called My Big Coin, which he said was backed by gold.
Randall Crater, the principal operator of My Big Coin Pay Inc., was arrested in Florida after being charged in an indictment filed in federal court in Boston with seven counts of wire fraud and illicit monetary transactions .
The indictment came after the US Commodity Futures Trading Commission last year sued the company, Crater and three other men, and accused them of participating in a fraudulent virtual money scheme.
The lawsuit resulted in one of the first court decisions that a virtual currency could be considered a commodity under the jurisdiction of the US derivatives regulator. This civil case remains pending.
Ray Chandler, a lawyer for Crater, said the 48-year-old was innocent and planned to plead not guilty when he was finally brought to justice.
"There are dozens and dozens of documents available that show that Mr. Crater has spared no effort to create a viable virtual currency," he said.
The case against Crater, of East Hampton, NY, is one of many recent prosecutions by US prosecutors and regulators over fraudulent schemes targeting cryptocurrency users.
Prosecutors said that between 2014 and 2017, Crater and others had sought to scam investors by seeking investment in My Big Coin, which they mistakenly claimed to be backed by credit. and could be traded on a virtual currency exchange.
In an email dated January 28, 2015, Crater told an investor that "we have 300 million gold in support," says the indictment.
The company's website also allegedly falsely claimed that its virtual currency was backed by gold bullion, could be transferred to anyone, and could be used to make purchases in any store that sold it. ; accept.
Rather than using investor funds as promised, Crater has diverted 6 million US dollars for his personal uses, such as the purchase of works of art, antiques and jewelry, said the indictment.
In its lawsuit, the CFTC alleged that the US $ 6 million came from at least 28 customers. According to the newspaper, Crater and other people invited them to buy My Big Coin, whose name resembled that of the popular Bitcoin virtual currency.
The US case v. Crater, US District Court, District of Massachusetts, No. 19-cr-10063.
(Report by Nate Raymond in Boston, edited by Paul Simao and Tom Brown)
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