Founder of cryptocurrency firm My Big Coin gets 8 years in prison for fraud

BOSTON, Jan 31 (Reuters) – The founder of a former cryptocurrency firm was sentenced to more than eight years in prison on Tuesday for defrauding investors and customers of millions of dollars by marketing a virtual currency called My Big Corner with lies and half-truths.

Federal prosecutors had urged U.S. District Judge Denise Casper in Boston to impose a 13-year prison sentence on Randall Crater for sending a message to others in the first sentencing of a cryptocurrency company founder for marketing fraud.

While Casper concluded that this request went too far, she rejected Crater’s claim that a 30-month prison sentence was enough to punish him for his false claims, including that My Big Coin was a genuine cryptocurrency. backed by gold.

“Cryptocurrency is definitely a newer business, a newer market, a 21st century market,” Casper said. “But the scheme behind it was centuries old, and it was fraud.”

Crater, who was sentenced to 100 months in total and ordered to lose nearly $7.7 million, is expected to appeal. In court, he apologized but said he never intended to defraud anyone.

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“I did not seek to steal money from anyone,” he said. “That doesn’t mean I don’t feel remorse.”

In July, a jury convicted Crater, 52, of committing wire fraud and engaging in illegal monetary transactions in a prosecution that spilled over from a case that set a precedent by the United States Commodity Futures Trading Commission.

The 2018 CFTC lawsuit against Crater and his bankrupt company, Nevada-based My Big Coin Inc, led to one of the first court rulings ruling that a virtual currency could be considered a commodity under the jurisdiction of the regulator.

Prosecutors then obtained Crater’s indictment in 2019 and accused him of causing investors and customers to lose $7.5 million from 2014 to 2017 with lies about My Big Coin, including the name resembled the popular bitcoin virtual currency.

Prosecutors said these false allegations included that My Big Coin was a genuine virtual currency, was backed by gold, and had a partnership with MasterCard. (MALE). Prosecutors said he used the money to buy cars, jewelry, artwork and antique coins.

Reporting by Nate Raymond in Boston Editing by Bill Berkrot

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