The Commodity Futures Trading Commission (CFTC) has charged My Big Coin (MBC) with the misappropriation of over $6 million in customer funds, alleging that they transferred those funds into personal bank accounts, and used them to purchase luxury goods. As ICOs grow in popularity, the frequency of prosecutorial activities appears to grow as well. Various organizations including the CFTC and SEC appear to be volleying jurisdiction back and forth as they come to terms with the growth of this new industry. As for MBC, several defendants have been named, including Randall Crater, Mark Gillespie, and My Big Coin Pay, Inc.
On January 16, Judge Rya Zobel of the US District Court for the District of Massachusetts issued a restraining order that froze the defendants’ assets. As part of the order, the assets of several other parties were also frozen, including Relief Defendants Kimberly Renee Benge (dba Greyshore Advertisement / Advertiset), Barbara Crater Meeks, Erica Crater, Greyshore, LLC and Greyshore Technology, LLC. They have allegedly received customer funds without providing any legitimate services to clients.
It appears that the CFTC is looking to make an example out of MBC for their allegedly nefarious activities. James McDonald, Director of Enforcement for the CFTC stated, “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.”
The CFTC investigation covered a four year period, from January 2014 through January 2018. The CFTC alleges that the defendants made false and misleading claims, as well as omissions regarding MBC’s value, usage and trade status. The claim that it was backed by gold was also put under question.
The list of CFTC complaints against MBC is extensive. They allege that MBC falsely claimed that it was traded on several currency exchanges, and that MBC published false daily trading prices and a partnership with MasterCard that did not exist. If these charges are proved real, it would appear that MBC is not just ignorant of the law, but guilty of intentionally misleading customers in their messaging. This is a serious offense whether judged by the rule of law or the court of public opinion. Such behavior is a dark stain on what we as a community are trying to build together. The blockchain is a useful technology, and cryptocurrency is a useful means of exchange and a store of real value. When people enter the space with an intent to deceive people, rather than an intent to bring real value to the world, it makes our vision for the future that much harder to achieve.