Alleged crypto scammers seek more time to respond to CFTC complaint

The defendants in a case targeting My Big Coin Pay and the entities associated with it say they need more time to prepare as the CFTC has served voluminous written discovery requests.

Less than a month after the United States Commodity Futures Trading Commission (CFTC) secured another ruling that supported its right to go after virtual currency scams, the defendants in this case have addressed the Court asking for a raft of deadline extensions.

The case targets Randall Crater, his company My Big Coin Pay and a number of relief defendants. Under the allegations, since at least January 2014, the defendants have engaged in a fraudulent virtual currency scheme in which they solicited customers to purchase a fully-functioning virtual currency, MBC, by repeatedly making false and misleading claims about MBC’s value, usage, trade status, and financial backing.

Defendants’ fraudulent scheme involved My Big Coin, a virtual currency whose name sounds like Bitcoin, a functionally similar and well-known virtual currency. The defendants pitched their virtual currency as a particular item that was separately identifiable, unique, and moveable from one wallet or owner to another and represented that each individual MBC could be bought, sold, donated, and used to buy products worldwide. These representations, however, were false.

Defendants’ fraud involved making material misrepresentations and omissions to customers about MBC via email, websites, YouTube, press releases, social media, and in person. For instance, the defendants lied that MBC was backed by millions of dollars in gold, and would be used to stabilize the economies of 22 countries, giving the illusion that MBC was a safe bet.

On September, Judge Rya W. Zobel of the Massachusetts District Court nixed a motion to dismiss the case, finding that virtual currencies are commodities under the CEA.

Commodity is a defined term in the CEA, the Judge noted. It includes a host of specifically enumerated agricultural products as well as “all other goods and articles … and all services rights and interests … in which contracts for future delivery are presently or in the future dealt in.”

Earlier this week, the defendants in this case filed a motion with the Court, asking for more time to respond to the CFTC complaint and to complete discovery. The extension sought for completing the discovery is quite significant – until June 3, 2019, with the defendants claiming that the CFTC “has served voluminous written discovery requests to the defendants ranging from interrogatories, requests for production of documents, and requests for admissions, and additional time is needed to sort out the requests, communicate with the various defendants to properly respond while avoiding duplication of the tens of thousands of documents produced in the investigation”.

Furthermore, according to the defense counsel, defendant “Randall Crater has serious pre-existing health conditions that have impeded his ability to render timely assistance to legal counsel”.

The case against My Big Coin Pay continues at the Massachusetts District Court.