CFTC claims My Big Coin Pay, based in Nevada, misappropriated $6 million from 28 clients by selecting a name that sounds like bitcoin and also claiming the cryptocurrency was backed by gold. CFTC sued My Bit Coin Pay Inc. and entrepreneur Randall Crater in January. The suit is seen by some as an indicator of the CFTC’s authority over cryptocurrencies.
The CFTC claimed that the defendants falsely indicated the cryptocurrency was actively traded on several currency exchanges. The CFTC also claimed Crater and an associate, Mark Gillespie, collected funds from investors and redirected the funds to personal bank accounts, using the funds for personal expenses.
CFTC argued that defendants’ claims about My Big Coin were a fraud, which included false claims about its usage, trade status and value.
Judge Questions Both Sides
U.S. Judge Rya Zobel in Boston Zobel posed questions to both sides about the workings of cryptocurrencies. Zobel did not rule on Cater’s request to dismiss the case, but said she would try to arrive at a decision quickly…