Randall Crater, the founder of a US-based digital currency firm, has been charged with multiple counts of fraud after allegedly scamming investors of about six million dollars.
The 48 year old CEO from East Hampton, New York, was detained last week after a series of complains and reports about the Company’s operation. Afterward, Crater was charged in an indictment that was filed in the District of Massachusetts with three counts of unlawful monetary transactions and four counts of wire fraud after an investigation.
My Big Coins
The charges leveled against Crater are linked to his company, My Big Coin Pay, and the fraudulent gold-backed currency that he reportedly created marketed to investors: My Big Coins.
According to the indictment, Crater claimed that he told an investor that “we have 300 million in gold backing us,” but the reality was apparently very different.
In fact, the Coins were reportedly not backed by gold or any other valuable assets, and it appeared that they were not readily transferable. Instead of this, he alongside two others, which includes co-founder Mark Gillespie, are said to have embezzled about $6m in investor funds.
According to reports, over $500,000 of these stolen funds were spent by Crater at a New York auction house on jewelry, artwork, decorative figures, a rare stone, and antique coins. The crypto scam, which affected a considerable number of investors, is said to have run from 2014 to 2017 after the accused continued to build websites and social media accounts to market and lend credibility to his company.
Fintech Startups not Left Out
In a similar news, two persons were charged for running a multi-million dollar investment fraud scheme involving a fintech start-up just last week.
The two individuals, Michael A. Liberty, a 58 year old from of Windermere, Florida, and Paul Hess, 63 year old from Braintree, Massachusetts, are alleged to have diverted funds belonging to investors to their personal bank accounts after raising millions of dollars for a mobile payments company called Mozido.
After an adequate investigation into the operations of the fraudulent scheme, the accused, Liberty and Hess, were each charged with four counts of wire fraud, one count of securities fraud and one count of conspiracy to commit wire fraud.
The two crypto-related fraud scheme cases point to the dangers that investors repeatedly face in technology companies, as it appears that fraudsters are determined to take advantage of hype that comes with the industry continually.