My Big Coin founder gets 8-year jail sentence for crypto fraud

The founder of a defunct cryptocurrency company was sentenced Tuesday to more than eight years in prison for defrauding investors and customers out of millions of dollars by marketing a virtual currency called My Big Coin with lies and half-truths.

Federal prosecutors had asked US District Judge Denise Casper in Boston to give Randall Crater a 13-year sentence for sending a message to others in the first conviction of a cryptocurrency company founder for marketing fraud.

While Casper concluded that this request went too far, she dismissed Crater’s claim that a 30-month sentence was enough to punish him for his false claims, including claiming that My Big Coin was a real one, made by gold covered cryptocurrency.

“Definitely cryptocurrency is a newer company, a newer market, a 21st century market,” said Casper. “But the scheme at its core was ancient, and that was cheating.”

Crater, who has been sentenced to a total of 100 months in prison and faces a fine of almost US$7.7 million (around Rs. 63 million), is expected to appeal. In court, he apologized but said he never intended to cheat on anyone.

“I didn’t want to steal anyone’s money,” he said. “That doesn’t mean I don’t have regrets.”

In July, a jury found Crater, 52, guilty of wire fraud and conducting unlawful monetary transactions in a trial stemming from a precedent set by the US Commodity Futures Trading Commission.

The CFTC’s 2018 lawsuit against Crater and his failed venture, Nevada-based company My Big Coin, resulted in one of the first court rulings to find that a virtual currency could be considered a commodity within the regulator’s purview.

Prosecutors then secured Crater’s indictment in 2019, accusing him of tricking investors and customers into paying $7.5 million from 2014 to 2017 by lying about My Big Coin, whose name sounded similar to the popular virtual currency Bitcoin (around Rs. 6.1 billion) to lose.

Prosecutors said these false claims included that My Big Coin was a real virtual currency, backed by gold and partnered with MasterCard. Prosecutors said he used the money to buy cars, jewelry, artwork and antique coins.

© Thomson Reuters 2023