CFTC Continues Crackdown on Alleged Cryptocurrency Fraudsters

By Lydia Beyoud

The Commodity Futures Trading Commission is continuing its crackdown on alleged cryptocurreny fraudsters, this time against individuals who allegedly absconded with investors’ money to fund a lavish lifestyle.

A federal court in Boston unsealed a third CFTC enforcement suit Jan. 24 against two men running the Las Vegas-based cryptocurrency company My Big Coin Pay, Inc.

The CFTC alleged the defendants told investors their crytpocurrency, MBC, was backed by gold, had a partnership with MasterCard Inc., and made other “false and misleading claims and omissions” about its value, usage, and trade status.

The case follows two other enforcement cases announced Jan. 19. “As this case shows, the CFTC is actively policing the virtual currency markets and will vigorously enforce the anti-fraud provisions of the Commodity Exchange Act,” CFTC Enforcement Director James McDonald said in a statement.

The agency alleged Randall Crater of East Hampton, N.Y. and Mark Gillespie of Hartland, Mich., committed commodity fraud and misappropriated more than $6 million from customers since January 2014.

The judge also froze their assets and those of Crater’s wife, sister, and mother, to whom the CFTC alleged the primary defendants funneled money.

The parties are expected to appear before the judge in Boston next week. “My client looks forward to having an opportunity to respond to the allegations in full as Mr. Gillespie and My Big Coin are confident that their actions were appropriate,” Adam S. Tracy, managing partner of the Tracy Firm in Chicago, told Bloomberg Law. Tracy represents both Gillespie and My Big Coin Pay.

The attorney for the Crater family told Bloomberg Law he would be bringing on experienced lawyers admitted in Massachusetts to assist in his clients’ defense. “These are very serious charges. But they are charges only,” said Ray Chandler of Chandler & Jennings LLC, based in Manning, S.C.

The case is CFTC v. My Big Coin Pay Inc. , D. Mass., No. 18-cv-10077, complaint unsealed 1/24/18.

To contact the reporter on this story: Lydia Beyoud in Washington at lbeyoud@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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