My Big Coin is the cryptocurrency regulators warned you about. The Commodities Futures Trading Commission (CFTC) has filed charges against My Big Coin (MBC) and its founders for misappropriating more than $6 million from customers in a cryptocurrency-fueled Ponzi scheme. While the company gave the illusion it had inked a deal with Mastercard, not to mention promoting a gold-backed coin for its digital wallet, investors eventually grew suspicious only to have those concerns squashed by the company under the guise of more coins.
The agency filed the complaint in a Massachusetts court on Jan. 16, charging the Nevada-based startup as well as founder Randall Crater and his associate Mark Gillespie, of New York and Michigan, respectively, with fraud and misappropriation of the funds, which they collected from non-suspecting investors in My Big Coin and redirected into their personal bank accounts, for personal expenses and to go on a shopping spree.
My Big Coin’s attorney Adam Tracy is quoted by Reuters as saying:
“The allegations contained in the CFTC’s complaint are just that, allegations, and I’ll be working with client in coming days to formulate a response to the complaint.”
MBC touted its coin as a gold-backed cryptocurrency, which helped them to attract $6 million-plus to their coffers since 2014, the lion’s share of which came from the state of Massachusetts. Here’s the rub: According to the CFTC, it was all a fraud, comprised of “false and misleading claims and omissions about MBC’s value, usage, and trade status.”
Something that stands out on the My Big Coin website is the company’s lack of regard for KYC/AML protocols. They harp on speed and privacy, making no qualms about their “no approval process.” This was a big red alert for regulators, no doubt.
My Big Coin bills itself as a peer-to-peer digital currency, with an emphasis on the decentralized nature of their cryptocurrency. Founded in 2013, the project is comprised of a blockchain wallet and a coin designed for consumers and merchants to trade, shop and donate globally whilst earning 1% in interest each year, as per the company’s website, which as of publication was still up. MBC is a mined coin, which the company claimed occurred by “leaving the wallet open” to earn more MBC.
While MBC’s Twitter page is mostly filled with promotions of broader cryptocurrency-related developments, there’s also a repeated attempt to get followers to “vote for My Big Coin for the New Exchange.” Participants on a bitcointalk.org forum urged the startup to do an airdrop given that there was no ICO to incentivize buyers, which MBC seemed to go along with.
Incidentally, one of the charges in the CFTC complaint is that the defendants “misrepresented” that they were “actively being traded on several currency exchanges.” Gillespie, one of the defendants in the CFTC complaint, was responsible for soliciting investments from across the United States.
Featured image from Shutterstock.