My Big Coin Pay founder charged over alleged $6 million crypto fraud

The founder of purported cryptocurrency and virtual payment services firm My Big Coin Pay has been charged over an alleged scheme to defraud investors.

Randall Crater, 48, took $6 million from investors for virtual currency that did not exist, according to the United States Attorney’s office.

Mr Crater has been charged with four counts of wire fraud and three counts of money laundering.

A press release from the US Attorney’s office said: “Mr Crater and his associates falsely claimed that Coins was a fully functioning cryptocurrency backed by valuable assets such as gold, oil, and other assets.

“They also falsely told investors that Coins could readily be exchanged for government-backed paper currency or other virtual currencies.”

Fraud charges

In January 2018, the Commodity Futures Trading Commission brought commodity fraud charges against Mr Crater and My Big Coin Inc, reports the East Hampton Star.

The commission also filed civil charges against John Roche, the chief executive officer of My Big Coin.

Charges were also filed against two of Mr Crater’s associates – Mark Gillespie and Michael Kruger.

Mr Crater faces a maximum sentence of 20 years in prison on the wire fraud charges and a 10-year prison sentence on the money laundering charges.

Last month, the FBI warned investors about the potential risks of fraudulent Initial Coin Offerings (ICOs).

Speaking to Netherlands-based financial news site the Paypers, the Bureau outlined the key strategies of scams, which included misrepresentation of the team and false claims of how much the project will affect the industry.