The U.S. Commodity Futures Trading Commission is looking for permission from a federal court judge to pursue a lawsuit against a cryptocurrency company called My Big Coin, claiming it fraudulently gathered funds from 28 clients to the sum of $6 million. The commission also claims the company tricked investors by using a name similar to Bitcoin and falsely alleging that investments were backed by gold.
My Big Coin Pay Inc. is a Nevada-based company trading as a cryptocurrency and founded by entrepreneur Randall Crater. In January this year, the CFTC sued the company claiming that Crater and fellow employee Mark Gillespie had defrauded investors and moved funds they had collected to personal bank accounts. Further allegations include false claims about the company’s value and how it was traded on a number of currency exchanges.
A key factor in the case is the question of whether or not the CFTC has jurisdiction to pursue such a case. My Big Coin’s legal representative, Katherine Cooper, claims the CFTC has gone beyond their remit but a request by Cater to have the case dismissed was not ruled on.
Jonah McCarthy, attorney for the CFTC, claims the virtual currency falls under the commission’s definition of a commodity. However, Cooper argues that this cannot be the case since it does not have a futures contract trading on it. U.S. Judge Rya Zobel has questioned the CFTC on how it reached its conclusion that the scheme is a fraud, but has yet to reach a decision either way.
In a previous case in Brooklyn last year, a U.S. judge ruled that the CFTC can regulate digital assets as commodities, including Bitcoin.
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