CFTC charges My Big Coin Pay with fraud and misappropriation

The US CFTC has started an investigation against My Big Coin and frozen the assets of its owners. The department has pointed out in its investigation that the owners and misrepresented the facts and misused the funds raised from the investors. The owners used the funds of the investors to cover their personal expenses.
US Commodity Futures Trading Commission (CFTC) stated in their recent investigation that the owners of My Big Coin have solicited more than $6 million from investors in a virtual currency scam. On January 16th, the CFTC  announced filing a federal court enforcement action against Randall Crater and Mark Gillespie, charging them with fraud and misappropriation.

The CFTC complaint charges Crater, Gillespie, and My Big Coin Pay, Inc (MBC) with misappropriating over $6 million from their investors. The charge claims that the defendants transferred the investors' funds into their personal accounts. The defendants then used this money to buy property, vehicles, and cover other personal expenses.

When investors began to question their MBC accounts, the defendants, in order to protect their scam, offered additional coins to the investors. They told their investors that they had secured deals with more exchanges to trade their coins.

In their investigation, CFTC explains:

Defendants allegedly used these misappropriated funds to purchase a home, antiques, fine art, jewelry, luxury goods, furniture, interior decorating and other home improvement services, travel, and entertainment.

The MBC token misrepresented the following, as per CFTC's statement:

  • The defendants claimed that the MBC was being actively traded on exchanges, when in reality it wasn’t.
  • MBC’s website provided daily reports on the price of the MBC token, when in reality MBC was not being traded anywhere.
  • MBC’s website also claimed that their tokens were backed up by gold. This was false, as the MBC tokens were non-existent.
  • MBC also claimed that they were forming a partnership with MasterCard, and that their tokens could be used anywhere where MasterCard was accpeted. However, this was false and there was no such partnership in process.

These were some of the lies pointed out by CFTC in their investigation. The CFTC hopes to actively pursue the investigation and protect investors from such Ponzi schemes. The Director of CFTC, James McDonald, had the following comments regarding the investigation:
As this case shows, the CFTC is actively policing the virtual currency markets and will vigorously enforce the anti-fraud provisions of the Commodity Exchange Act. In addition to harming customers, fraud in connection with virtual currencies inhibits potentially market-enhancing developments in this area. We caution potential virtual currency customers, once again, that they should engage in appropriate diligence before purchasing virtual currencies.

This investigation shows that governmental departments are now actively pursuing cases against virtual currencies. The deregulated environment surrounding the digital currency market created an opportunity for many scammers to take advantage of investors. Millions of dollars have been taken from investors through fraudulent ICOs. However, with governments pursuing fraudulent ICOs, scammers may be stopped from taking money wrongfully from investors.