By Nate Raymond
BOSTON, Jan 31 (Reuters) - The founder of a defunct
cryptocurrency business was sentenced on Tuesday to more than
eight years in prison for defrauding investors and customers out
of millions of dollars by marketing a virtual currency called My
Big Coin with lies and half-truths.
Federal prosecutors had urged U.S. District Judge Denise
Casper in Boston to impose a 13-year prison term on Randall
Crater to send a message to others in the first sentencing of a
cryptocurrency company founder for a marketing fraud.
While Casper concluded that that request went too far, she
rejected Crater's contention that a 30-month prison term was
sufficient to punish him for his false claims, including that My
Big Coin was a real cryptocurrency backed by gold.
"Certainly cryptocurrency is a newer enterprise, a newer
market, a 21st Century market," Casper said. "But the scheme at
its core was age-old, and that was fraud."
Crater, who was sentenced to 100 months in total and ordered
to forfeit nearly $7.7 million, is expected to appeal. In court,
he apologized but said he never meant to defraud anyone.
"I did not set out to steal money from anyone," he said.
"That does not mean I am not remorseful."
A jury in July found Crater, 52, guilty of committing wire
fraud and making unlawful monetary transactions in a prosecution
that spilled out of a precedent-setting case by the U.S.
Commodity Futures Trading Commission.
The CFTC's 2018 lawsuit against Crater and his failed
company, Nevada-based My Big Coin Inc, led to one of the first
court rulings holding that a virtual currency could be
considered a commodity within the regulator's jurisdiction.
Prosecutors subsequently secured Crater's indictment in 2019
and accused him of causing investors and customers to lose $7.5
million from 2014 to 2017 with lies about My Big Coin, whose
name sounded similar to the popular virtual currency bitcoin.
Prosecutors said those false claims included that My Big
Coin was a real virtual currency, was backed by gold and had a
partnership with MasterCard . Prosecutors said he used the
money to buy cars, jewelry, artwork and antique coins.
(Reporting by Nate Raymond in Boston
Editing by Bill Berkrot)
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nate.raymond.thomsonreuters.com@reuters.net))
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