CFTC Orders $26M Penalty Against My Big Coin Crypto Fraud Executives

We A Massachusetts federal court has imposed a $25.8 million penalty against My Big Coin executives following a default judgment in the Commodity Futures Trading Commission's enforcement action against the cryptocurrency fraud scheme.

The court ordered My Big Coin Pay, Inc., My Big Coin, Inc., and executives Mark Gillespie and John Roche to pay $19.32 million in civil monetary penalties plus $6.44 million in restitution to defrauded investors. The defendants also received permanent trading bans, prohibiting them from participating in CFTC-regulated markets or conducting related financial activities.

The CFTC announced Wednesday that the judgment represents the culmination of its case against operators who allegedly orchestrated a multi-year investment fraud targeting cryptocurrency investors through false representations about their digital asset's legitimacy and backing.

Fraudulent Scheme Targeted 28 Investors Over Three-Year Period

Between January 2014 and June 2017, Gillespie, Roche, and co-conspirator Randall Crater solicited investments in My Big Coin (MBC) from 28 victims, ultimately defrauding them of over $6 million, according to CFTC allegations.

The regulatory agency accused the defendants of making "false and misleading claims and omissions about MBC's value, usage, and trade status" while fraudulently claiming the cryptocurrency was backed by gold reserves. These misrepresentations were central to convincing investors to purchase the worthless digital tokens.

The CFTC's case against another alleged operator, Michael Kruger, was dismissed following his death during the proceedings. However, the agency cautioned that defrauded investors may struggle to recover their losses because "the wrongdoers may not have sufficient funds or assets" to satisfy the judgment.

Co-Conspirator Crater Previously Sentenced to Prison Term

Randall Crater, the third major figure in the My Big Coin scheme, received separate punishment through both civil and criminal proceedings. Earlier this year, the court ordered Crater to pay $7.6 million in investor restitution as part of the civil enforcement action.

Crater's criminal case concluded in January 2023 when he received an eight-year prison sentence after a jury convicted him on multiple federal charges. The conviction included four counts of wire fraud, three counts of unlawful monetary transactions, and one count of operating an unlicensed money-transmitting business.

Crater's legal team unsuccessfully appealed the conviction in February 2024, arguing that the court violated his Sixth Amendment rights. The appellate court denied his request for a new trial, solidifying his conviction and sentence.

This enforcement action demonstrates the CFTC's continued commitment to pursuing cryptocurrency fraud cases, particularly those involving false backing claims and misrepresentation of digital asset legitimacy to unsuspecting investors.