The founder of My Big Coin, one of the many fraudulent offerings, has been arrested and charged with multiple counts of fraud as well as illegal money transfers.
In the cryptosphere, there has never been a shortage of Ponzi Schemes and dodgy projects. Most of the outright scams are all in the past, and we know about them, yet new ones tend to pop up every now and then.
Not many of us must be familiar with My Big Coin as it wasn’t marketed all that well. The cryptocurrency project secured millions in funding from under three dozen investors. It seems that 28 investors put a combined $6 million into this project, despite many warning signs.
The My Big Coin founder, Randall Crater, claimed that this cryptocurrency is backed by $300 million in gold reserves. With such significant reserves in place, one wouldn’t actually need any investor to contribute additional funds, though some people saw merit in this concept. However, it quickly became evident by the court documents that there were neither gold coins nor gold assets to speak of.
Crater used the investors’ money to buy physical gold coins to enrich himself, and not a single coin was used for My Big Coin project.
Crater wasn’t alone in this scam. Two other helpers have been identified to be involved in the Ponzi Scheme. One of them is the co-founder Mark Gillespie, and the other is yet to be named.
All three of them are charged with seven counts of fraud as well as illicit money transfers. The offenders claimed My Big Coin would be backed by 100% gold and was a safer investment than FDIC-backed venture.
Crater purposely tried to dissuade users from converting their coins back after dumping until a deal with a major cryptocurrency exchange was finalized, which never happened.