$6 000 000 USD
MY BIG COIN
DESCRIPTION OF EVENTS
"Launched in 2013 by Randall Crater, My Big Coin started as a virtual currency wallet and platform that allowed merchants and consumers to process transactions with their own digital tokens."
"Rather than use investor funds as promised, Crater misappropriated $6 million for his personal uses, such as buying artwork, antiques and jewelry, the indictment said."
"In 2018 it was discovered the company had been scamming people out of their hard-earned money. In exchange for their dollars, unlucky customers were getting nothing. A company that purported to be selling legitimate Bitcoin was selling air."
"My Big Coin managed to stay in business for a long time without being discovered because of pretending to be a legitimate business. It even claimed to be partnering with MasterCard. Over the cause of its operation, the company lured investors into funding around $6 million."
"Mr. Crater was later arrested and charged with fraud and misappropriation. My Big Coin lawsuit became one of the first in American history that revealed a cryptocurrency could be considered a commodity with the jurisdiction held by the U.S. derivatives regulator."
"The founder of a Nevada-based company was arrested on Wednesday on federal charges he participated in a $6 million scheme to defraud people who wanted to buy a virtual currency called My Big Coin that he claimed was backed by gold."
"My Big Coin Pay is a major decision that clarifies the scope of the CFTC’s regulatory authority over cryptocurrencies that do not include a futures component. However, several questions remain. First, the court held that the CFTC had met its burden at the pleadings stage, leaving open the possibility that My Big Coin may be found to not be a commodity in later proceedings.93 Second, the court did not attempt to reconcile its opinion with CFTC v. Monex Credit Co.’s holding that the language of Section 6(c)(1) “prohibited fraudulent manipulation but not fraud without manipulation.”94 It remains to be seen whether My Big Coin Pay will be an isolated case or whether the CFTC will continue to play a meaningful role in keeping the cryptocurrency sector accountable."
MyBigCoin operated a fraudulent company which made significant false claims, including a false partnership with Mastercard and being backed by gold. In the end, participants were receiving nothing, and $6m was lost without any opportunity of recovery.
HOW COULD THIS HAVE BEEN PREVENTED?
Providing a simple registration service ensures that operators are known. Regular validations can support any claims of asset backing such as gold, with cryptographic proof that all customers were fully included.
Six Cryptocurrency Fraud Schemes You Should Know | Onyx (Sep 18)
U.S. charges My Big Coin virtual currency firm founder with fraud | Reuters (Oct 13)
https://www.bu.edu/rbfl/files/2021/02/6-Noah-Cherry.pdf (Oct 13)
My Big Coin - Any Time, Any Place, My Big Coin (Oct 13)
My Big Coin - mybigcoin.com - MBC - YouTube (Oct 13)
5 Bitcoin Fraud Cases You Should Know About (Aug 14)
Cryptocurrencies That Were Proven to Be Scams | The Chain (Jan 16)