The founder of a once-thriving cryptocurrency firm, My Big Coin, was sentenced to eight years in prison on Tuesday for defrauding investors and customers of millions of dollars. The fraudulent scheme revolved around the false marketing of My Big Coin, a virtual currency that was touted as a real cryptocurrency, backed by gold, and with a partnership with MasterCard.
Federal prosecutors had asked U.S. District Judge Denise Casper in Boston to impose a 13-year prison term on Randall Crater, the founder of My Big Coin, in an effort to send a strong message to others in the cryptocurrency industry. However, Judge Casper concluded that this request was too harsh and instead imposed a 100-month sentence, but rejected Crater’s argument that a 30-month term would be sufficient.
“Certainly cryptocurrency is a newer enterprise, a 21st Century market,” Judge Casper stated. “But the scheme at its core was age-old, and that was fraud.”
The verdict was the outcome of a long-standing case brought by the US Commodity Futures Trading Commission, which resulted in one of the first court rulings to recognize virtual currencies as a commodity under their jurisdiction. Prosecutors secured Crater’s indictment in 2019 and accused him of causing investors and customers to lose $7.5 million between 2014 and 2017 through false claims about My Big Coin.
During the trial, Crater apologized for his actions and claimed that he never intended to defraud anyone. “I did not set out to steal money from any
one,” he stated in court. “That does not mean I am not remorseful.” Despite his apology, a jury found him guilty of committing wire fraud and making unlawful monetary transactions in July of the same year.
The money raised through the fraudulent scheme was used to fund a lavish lifestyle, with Crater using the funds to purchase cars, jewelry, artwork, and antique coins. The judge ordered Crater to pay a forfeiture of nearly $7.7 million, which will go towards compensating the victims of his fraudulent scheme.
Despite the verdict, Crater is expected to appeal the sentence, but the case serves as a cautionary tale for others in the cryptocurrency industry. It highlights the importance of transparency and honesty in a market that is still relatively new and susceptible to scams and fraud. The sentence imposed on Crater sends a clear message that fraudulent activities in the cryptocurrency space will not be tolerated and perpetrators will face severe consequences.
As cryptocurrencies continue to gain popularity and attract a wider range of investors, it’s crucial for everyone to exercise caution and due diligence when investing in any virtual currency. The My Big Coin case serves as a reminder that not all that glitters is gold and that investors must be vigilant in order to protect their hard-earned money.
