The Commodity Futures Trading Commission (CFTC) has filed a lawsuit against “a virtual currency know as My Big Coin (MBC).” The CFTC alleges that the company raised more than $6 million USD by making false and misleading claims regarding the cryptocurrency’s utility and backing.
Also Read: Vouching Bitfinex and Tether’s Bank Accounts Hold Nearly $3 Billion USD
My Big Coin Latest Virtual Currency to Be Targeted by CFTC
The CFTC accuses My Big Coin of “misappropriating over $6 million from customers […] and using those funds for personal expenses and the purchase of luxury goods.” The complaint is filed against Randall Crater, the founder of the cryptocurrency, Mark Gillespie, who is accused of soliciting customers on behalf of the scheme, and My Big Coin, Inc.
My Big Coin is accused of “fraudulently soliciting potential and existing MBC customers throughout the United States by making false and misleading claims and omissions about MBC’s value, usage, and trade status,” including, among other claims, that “MBC was backed by gold.” The company also issued “payouts to customers [that] were fraudulently obtained from other customers in the manner of a Ponzi scheme.”
More Than $5 Million USD Was “Fraudulently Solicited From Customers in the District of Massachusetts”
James Macdonald, The CFTC’s Director of Enforcement, 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.”
Adam Tracy, a lawyer representing My Big Coin, told Reuters that “the allegations contained in the CFTC’s complaint are just that, allegations, and I’ll be working with my client in the coming days to formulate a response to the complaint.”
Misappropriated Funds Used for Personal Purchases
The defendants are accused of having spent “virtually all of the approximately $6 million” on personal purchases, after “transferring customer funds into personal bank accounts.” The aforementioned purchases include “a home, antiques, fine art, jewelry, luxury goods, furniture, interior decorating and other home improvement services, travel, and entertainment.”
The CFTC filing will seek “civil monetary penalties, restitution, rescission, disgorgement of ill-gotten gains, trading and registrations bans” against the defendants.
Which altcoin do you think will be next to be targeted by the CFTC? Share your predictions in the comments section below!
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