Latest in Gear

Image credit:

US charges cryptocurrency creators over $6 million scam

Feds say My Big Coin Pay is a take-the-money-and-run operation.
Jon Fingas, @jonfingas
January 24, 2018
Share
Tweet
Share

Sponsored Links

Getty Images/iStockphoto

US regulators are making good on their promise to get tough on crypto fraud. The Commodity Futures Trading Commission has filed complaints charging My Big Coin Pay and two of its operators, Randall Crater and Mark Gillespie, with using the company's My Big Coin cryptocurrency as part of an ongoing, not-so-subtle Ponzi scheme. Crater and Gillespie allegedly drew investments in the virtual money by making numerous bogus claims (that it was traded on multiple exchanges, backed by gold and had a MasterCard partnership) and promptly "misappropriated" the $6 million in funds for buying a home, jewelry, vacations and other indulgences.

To make matters worse, the scammers reportedly tried to hide their fraud by issuing additional coins and claiming to have a new exchange deal that 'conveniently' made it a bad idea for customers to redeem their holdings.

This isn't the only case in the pipeline. The CFTC had already filed fraud charges against three other operators the week before. However, it illustrates the shadiness that still pervades cryptocurrency startups. While many initial coin offerings are sincere efforts, some are questionable cash grabs -- and in the most extreme circumstances, they're outright rip-offs or prone to theft. Continued crackdowns like this might deter some perpetrators, but it may be hard to completely eliminate as long as cryptocurrency values are through the roof.

All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you buy something through one of these links, we may earn an affiliate commission.
Comment
Comments
Share
Tweet
Share

Popular on Engadget

Xbox Series X first look: Fast, powerful and quiet

Xbox Series X first look: Fast, powerful and quiet

View
Windows XP source code leak sheds light on Microsoft's OS history

Windows XP source code leak sheds light on Microsoft's OS history

View
NASA wants ideas for keeping Moon missions powered in the dark

NASA wants ideas for keeping Moon missions powered in the dark

View
Dell updated its 13-inch XPS laptops with 11th-gen Intel CPUs

Dell updated its 13-inch XPS laptops with 11th-gen Intel CPUs

View
Roku’s new $129 soundbar offers Dolby Audio and 4K streaming

Roku’s new $129 soundbar offers Dolby Audio and 4K streaming

View

From around the web

Page 1Page 1ear iconeye iconFill 23text filevr