New York citizen Randall Crater has been charged with the development of an allegedly fraudulent cryptocurrency “My Big Coins” and marketing it to investors.
The United States Department of Justice (DoJ) has charged a New York-based operator of a purported cryptocurrency payment services firm with a wire fraud and unlawful monetary transactions. The DoJ announced the allegations in a press release on Feb. 27.
According to the release, New York citizen Randall Crater founded and managed My Big Coin Pay Inc. (My Big Coin), a purported cryptocurrency and virtual payment services company headquartered in Las Vegas, Nevada. From 2014 to 2017, Crater and his associates allegedly developed a fraudulent cryptocurrency “My Big Coins” and marketed it to investors.
The accused allegedly lured investors by claiming that the coin was a fully functioning virtual currency pegged to valuable physical assets like gold, which could be exchanged for goods, cash, or other cryptocurrencies. The DoJ claims that, in reality, this was not the case.
The indictment states that Crater conducted four counts of wire fraud and three counts of unlawful monetary transactions, as well as misappropriated more than $6 million in investor funds for personal use. However, the DoJ further noted that “the charges in the indictment are merely allegations, and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.”
Earlier in February, a lawsuit in a U.S. district court in New York claimed that an investor had been misled into investing $2 million dollars in the cryptocurrency MCash. “Not only was the MCash Token not properly registered with the U.S. Securities and Exchange Commission, but more importantly, in connection with selling the MCash Token. Defendants made numerous misrepresentations and omissions that induced Plaintiff to invest $2 million,” the filing states.
Last December, research from the Wall Street Journal revealed that hundreds of cryptocurrency offerings showed signs of fraudulent activity, improbable returns and plagiarism. White papers of more than 2,000 of the 3,291 investigated projects reportedly contained sentences with luring terms such as “nothing to lose, guaranteed profit, return on investment, highest return, high return, funds profit, no risk and little risk.”