If you search the web for “My Big Coin,” you find a lot of seemingly-legitimate results. Even Crunchbase has a listing for My Big Coin. As recently as Valentine’s Day, the cryptocurrency project was tweeting to their more than 260,000 followers. But today, the Justice Department announced charges against the proprietors of My Big Coin, alleging that they were running a fraudulent operation all this time.
Founded near the end of 2013 by New York resident Randall Crater, My Big Coin supposedly “allows for the anonymous exchange of currency.”
The platform used its own crypto tokens, the eponymous My Big Coins, which were allegedly backed by gold and other hard assets. The company claimed they were worth $310 each.
The tokens were not listed on many crypto exchanges, however. My Big Coin tweeted about NovaExchange, which does have a market for the fraudulent cryptocurrency. That said, the buy and sell orders there are wildly out of sync with each other. The highest bid is 0.00000126 while the lowest ask is 0.00019994 (BTC), or just under $1.
While the project claimed its tokens were backed by hard assets, the Department of Justice says this was not the case.
Randall Crater’s indictment reads, in part:
“In reality, Coins were not backed by gold or other assets, were not readily exchangeable virtual currency, and had little to no actual value. Rather, Crater misappropriated more than $6 million of investor money for personal use.”
CCN.com called the number listed for My Big Coin on Crunchbase, as MyBigCoin.com is currently unavailable. No one answered, but we left a message offering to tell their side of the story.
One part of the indictment jumps out as objectionable: clearly, the tokens were traded somewhere, sometimes, at least.
For his part, Crater is currently in jail. He is slated to appear today at the US District Court in the Middle District of Florida.
Does this mean they’re not a scam? Certainly not. Scamtastic coins find their way onto crypto exchanges all the time. Novaexchange and YoBit notoriously list lots of coins with extremely low market caps.
The Justice Department alleges that Crater and at least two other individuals lied to potential investors, telling them that coins were backed by millions of dollars in gold. They list at least five examples of Crater and his partners claiming the cryptocurrency was “backed with gold” using Twitter and direct e-mail.
The scheme went on for a long time, which makes one wonder why the indictment is only just forthcoming. Were investors happy until a certain point? Is the Crypto Winter responsible for the shaking out of this scam?
The indictment outlines instances that Crater misused investor money. In total, he allegedly spent around $500,000 at Lord and Guy LLC, an auction house located in New York. It also details some major investments in excess of $100,000, sent by traditional bank wire.
As we said at the top, My Big Coin did a great job of putting on a legitimate front. They acquired a penny stock company in 2015 called Shot Spirits Corporation. They got listed on Crunchbase, where many legitimate companies are listed. Their cryptocurrency token, which the Justice Department is essentially calling a sh*tcoin, found its way onto some exchanges. They accepted bank wires for deposits. And all the while, they were allegedly scamming.
As the DOJ’s press release notes:
“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.”
A trial will have to determine if Crater is guilty of “four counts of wire fraud and three counts of unlawful monetary transactions.” If he is found guilty, all of the proceeds of the New York scam artist’s operation, plus fines and fees, will be taken from him.
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Last modified: May 20, 2020 12:18 AM UTC