US government files charges in $6 million My Big Coin cryptocurrency Ponzi scheme


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On Wednesday, the U.S. Commodity Futures Buying and selling Fee (CFTC) revealed that it has filed a lawsuit towards the creators of My Massive Coin, an alleged cryptocurrency rip-off that took naive traders for $6 million.

The case, filed on January 16 and unsealed at present, costs Randall Crater, Mark Gillespie and My Massive Coin Pay, Inc. with commodity fraud and misappropriation of funds raised for a digital forex often called My Massive Coin (MBC).

The misappropriation costs embody “transferring buyer funds into private financial institution accounts, and utilizing these funds for private bills and the acquisition of luxurious items” together with “house, antiques, positive artwork, jewellery, luxurious items, furnishings, inside adorning and different house enchancment providers, journey, and leisure.” Sounds about proper for a cryptocurrency rip-off.

Because the CFTC particulars, the 2 named defendants operated an internet site for the nonexistent cryptocurrency that made various false and deceptive claims, together with characterizing the coin as being actively traded on a number of exchanges (it wasn’t) and stating the every day buying and selling worth for a coin that by no means existed. The pair behind My Massive Coin additionally claimed that the coin was backed by gold and was partnering with MasterCard, two clearly false assertions.

Extra like My Massive Con, eh?

“In actuality, as alleged, the supposed buying and selling outcomes had been illusory, and any payouts to prospects had been derived from funds fraudulently obtained from different prospects within the method of a Ponzi scheme,” the CFTC write-up summarizes.

My Massive Coin is perhaps the most recent cautionary story within the huge sea of coin scams, nevertheless it and the others we all know now are simply the tip of the iceberg. As worldwide regulators scramble to catch as much as a wierd new world that popped up underneath their noses, you’ll be able to guess for each authentic ICO or coin undertaking there’s a wave of sketchy ones ready to tear off grasping traders who don’t know higher.

As there isn’t a formal physique that kinds out authentic tasks from blatant Ponzi schemes, it’s essential to do thorough analysis of your personal earlier than investing in something. All the time. For those who’d like to review the anatomy of a rip-off, Crater’s personal MyBigCoin web site gives a helpful autopsy — simply please don’t ship that man your cash.

“As this case reveals, the CFTC is actively policing the digital forex markets and can vigorously implement the anti-fraud provisions of the Commodity Alternate Act,” CFTC Director of Enforcement James McDonald stated of the case.

“Along with harming prospects, fraud in reference to digital currencies inhibits doubtlessly market-enhancing developments on this space. We warning potential digital forex prospects, as soon as once more, that they need to have interaction in applicable diligence earlier than buying digital currencies.”

Featured Picture: RapidEye/Getty Pictures

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