A Massachusetts court has ordered the operators of the now-defunct cryptocurrency project My Big Coin to pay a hefty $25.8 million in penalties after being found guilty of running a fraudulent crypto scheme. The decision, made on behalf of the Commodity Futures Trading Commission (CFTC), brings to light one of the earlier scams in the crypto world, which ran between January 2014 and June 2017.

The fraud was led by Mark Gillespie, John Roche, and Randall Crater, who together managed to con investors out of more than $6 million by making false claims about the value and backing of the token, My Big Coin (MBC).

False Promises and Fake Gold Backing

The scammers claimed that My Big Coin was backed by gold, widely accepted for trading, and held real value in the market. These promises convinced 28 investors to pour money into what seemed like a promising cryptocurrency. In reality, there was no gold, no true backing, and no market value behind MBC.

The fraudsters used flashy marketing and clever language to mislead people, exploiting the early excitement around cryptocurrencies at the time. Many investors were led to believe that they were investing in a secure and legitimate digital asset.

Court’s Decision: Heavy Fines and Trading Bans

As a result of the legal proceedings, the court ruled that:

• Gillespie and Roche must pay $19.32 million in fines.
• An additional $6.44 million must be paid to the 28 victims as compensation.
• The companies involved, My Big Coin Pay, Inc. and My Big Coin, Inc., are also held accountable.
• All parties, including the individuals and companies, are now banned from trading or participating in any markets regulated by the CFTC.

The court also noted that Michael Kruger, another person originally involved, was removed from the case due to his death.

Randall Crater: Convicted and Imprisoned

Another key player, Randall Crater, was convicted in July 2022 of multiple crimes, including wire fraud and operating an unlicensed money transmitting business. In January 2023, he was sentenced to over eight years in prison and ordered to repay $7.6 million to his victims.

Crater’s lawyers filed an appeal in February 2024, claiming his rights were violated during the trial, but a higher court rejected the appeal, confirming his conviction and sentence.

Victims Might Not Recover Full Funds

While the court has ordered the fraudsters to pay large sums, the CFTC has warned that victims may not recover all their money. This is because the scammers may not have enough assets or funds left to repay the full amount owed.

The case highlights a crucial message from the CFTC: investors must remain cautious, especially in the unregulated or loosely regulated crypto market, where scams can be disguised as legitimate opportunities.

The My Big Coin case stands as a serious warning to crypto investors. Despite the growing popularity of digital assets, fraud remains a significant risk. The $25.8 million fine and criminal convictions send a strong message: those who lie and deceive in the crypto world will face serious consequences.

Investors are encouraged to research thoroughly, verify claims, and stay updated with CFTC alerts to avoid falling victim to similar schemes.